Grayscale in talks with JPMorgan, Goldman Sachs for Bitcoin ETF role: Report
Crypto asset manager Grayscale Investments is reportedly in talks with firms including JPMorgan and Goldman Sachs about a potential role in its proposed spot Bitcoin ETF.
Bloomberg reported on Jan. 4 that Grayscale had held talks with both investment banks for the role, citing sources familiar with the matter. It comes less than a week after Grayscale filed an amended S-3 application with the SEC but didn't list any authorized participants.
Meanwhile, an earlier media report also suggests Goldman Sachs is also in discussion with BlackRock to act as an authorized participant for its own respective ETF, citing sources familiar with the matter.
Blackrock previously amended its S-1 filing to name quantitative trading firm Jane Street and JPMorgan as authorized participants in its proposed ETF.
It took over ten years, but we’re finally on the verge of having spot bitcoin ETFs approved in the USA.
— Jake Chervinsky (@jchervinsky) January 4, 2024
(Yes, we are.)
Many deserve credit for this milestone, but chiefly @Grayscale and its lawyers, who had the guts to fight this out in court and won.
Let’s fight more in 2024.
An authorized participant plays a key role in managing an ETF, as it facilitates the creation and redemption of shares in the fund. An ETF issuer can name multiple financial firms to act as an authorized participant.
Notably, ETF applicants aren’t required to name their authorized participants in their respective S-1 or S-3 filings, meaning that other financial firms still have a window to come on board.
Related: ‘Likely rejection’ or smooth sailing? Experts weigh in on potential spot Bitcoin ETF
While JPMorgan has already been named as an authorized participant for several proposed spot Bitcoin ETFs, Goldman Sachs could potentially join other Wall Street giants, including Cantor Fitzgerald and quantitative trading firm Jane Street, that have been given an authorized participant role for various issuers.
Goldman Sachs has historically held a neutral stance towards cryptocurrencies and the digital asset sector. In a Dec. 27 interview with Fox Business, Goldman’s head of digital assets Matthew McDermott said that a Bitcoin ETF approval will help the crypto market mature and invite increased institutional investment into digital assets more broadly.
A spot Bitcoin ETF has never been approved in the United States. However, ETF analysts are pegging the likelihood of approval at 90% before Jan. 10 this year.
New Research note from me today. We still believe 90% chance by Jan 10 for spot #Bitcoin ETF approvals. But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur pic.twitter.com/u6dBva1ytD
— James Seyffart (@JSeyff) November 8, 2023
There are currently 14 asset managers looking to issue a spot Bitcoin ETF, an investment vehicle that would provide institutional investors with direct and regulated exposure to Bitcoin in the United States.
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