Goldman Sachs Explores Bitcoin ETF Involvement Through BlackRock and Grayscale, Say Sources
Jan 3, 2024
3 min read
Goldman Sachs, a prominent Wall Street investment bank, is reportedly in discussions to play a pivotal role as an “authorized participant” (AP) for the proposed bitcoin exchange-traded funds (ETFs) by BlackRock and Grayscale, pending approval from the U.S. Securities and Exchange Commission (SEC). According to individuals familiar with the matter, Goldman Sachs is considering the crucial role of an AP, a significant responsibility in the multi-trillion-dollar ETF industry. This role involves the creation and redemption of ETF shares to maintain alignment with the underlying assets, ensuring smooth trading.
If the talks materialize, Goldman Sachs will join other financial heavyweights such as JPMorgan Chase, Jane Street, and Cantor Fitzgerald, who have already been announced as authorized participants for various companies seeking SEC approval to launch bitcoin ETFs in the United States. It is anticipated that more names, including major U.S. banks traditionally cautious about direct involvement with cryptocurrencies, will emerge in the bitcoin ETF landscape.
The inclusion of big U.S. banks in the bitcoin ETF arena has been facilitated by the adoption of a cash-based mechanism for handling the bitcoin supporting the shares, considered a crucial element in securing SEC approval. The firms Goldman Sachs is reportedly engaging with, BlackRock and Grayscale, are significant players in the financial industry. BlackRock stands as the world’s largest asset manager, while Grayscale manages the $26 billion Grayscale Bitcoin Trust, the largest bitcoin investment vehicle. Grayscale aims to convert its trust into a more accessible ETF structure, following a landmark court victory against the SEC that paved the way for the transition.
While Goldman Sachs has not officially commented on the matter, both BlackRock and Grayscale declined to provide statements. The move signifies the growing interest of major financial institutions in participating in the evolving landscape of cryptocurrency investment products, particularly bitcoin ETFs.