Grayscale Investments, a prominent crypto asset manager, is reportedly engaging in discussions with notable firms such as JPMorgan and Goldman Sachs regarding potential involvement in its proposed spot Bitcoin exchange-traded fund (ETF).
According to sources familiar with the matter, Bloomberg reported this development on January 4.
These discussions have surfaced shortly after Grayscale filed an amended S-3 application with the United States Securities and Exchange Commission (SEC), which notably did not specify any authorized participants.
Simultaneously, an earlier media report has indicated that Goldman Sachs is in talks with BlackRock, aiming to assume the role of an authorized participant for BlackRock’s ETF, citing inside sources.
An authorized participant plays a pivotal role in the management of an ETF, facilitating the creation and redemption of shares within the fund.
ETF issuers can appoint multiple financial institutions as authorized participants.
Notably, ETF applicants are not obliged to disclose their authorized participants in their S-1 or S-3 filings, which implies that other financial entities may still join in the future.
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While JPMorgan has already been designated as an authorized participant for several proposed spot Bitcoin ETFs, Goldman Sachs may soon join the ranks of other Wall Street giants, including Cantor Fitzgerald and Jane Street, which have previously secured authorized participant roles for other ETF issuers.
Goldman Sachs has historically maintained a neutral stance regarding cryptocurrencies and the digital asset sector.
Matthew McDermott, the Head of Digital Assets at Goldman Sachs, emphasized in a December 27 interview with Fox Business that the approval of a Bitcoin ETF would contribute to the maturation of the crypto market and attract increased institutional investment into digital assets on a broader scale.
Notably, a spot Bitcoin ETF has never received approval in the United States.
Nevertheless, experts in the ETF industry anticipate a 90% likelihood of approval before January 10.
Presently, there are 14 asset managers seeking to launch a spot Bitcoin ETF.
This development would offer institutional investors a regulated and direct avenue to gain exposure to Bitcoin within the United States.
