Nikolas Sargeant
Goldman Sachs, a renowned Wall Street investment bank, appears poised to assume a pivotal role in the introduction of Bitcoin ETFs by BlackRock and Grayscale in the U.S., according to sources familiar with the matter.
A Decade of Decentralization Unfolds
The bank is actively engaged in discussions to become an authorized participant (AP) for these exchange-traded funds, a crucial responsibility in the expansive ETF industry. As an AP, Goldman Sachs would play a central role in creating and redeeming ETF shares, ensuring their seamless alignment with underlying assets.
This move follows the recent announcement that major financial institutions, including JPMorgan Chase, Jane Street, and Cantor Fitzgerald, are taking on the AP role for companies seeking SEC approval for Bitcoin ETFs in the U.S. While more names are anticipated to surface, those revealed so far represent significant players in the U.S. financial landscape, with expectations that each Bitcoin ETF will eventually have five to 10 authorized participants.
In a noteworthy shift, prominent U.S. banks, traditionally cautious about direct involvement with cryptocurrencies, are being drawn into the anticipated Bitcoin ETF landscape. This shift is attributed to the adoption of a cash-based mechanism for managing the Bitcoin supporting the ETF shares, deemed essential for securing SEC approval.
Goldman Sachs is actively seeking partnerships with major players in this endeavor. BlackRock, the world's largest asset manager, and Grayscale, overseeing the $26 billion Grayscale Bitcoin Trust, the largest bitcoin investment vehicle, are key entities in this potential collaboration. Grayscale aims to transition its product from a trust structure to a more accessible ETF format.
