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Goldman Sachs, the leading Wall Street investment bank, reportedly reached out to BlackRock and Grayscale with the intention of joining their Bitcoin spot ETF programs. Recent reports suggest that the bank seeks to become an authorized participant (AP) for the proposed exchange-traded funds which are currently still awaiting approval from the US Securities and Exchange Commission (SEC).
Goldman Sachs joins other major banks by joining a Bitcoin ETF applicant
According to a recent report by CoinDesk, which cited anonymous sources familiar with the matter, Goldman Sachs wishes to take on the role of an authorized participant in multiple mentioned ETFs. As an AP, the bank would play a crucial role in the Bitcoin spot ETF industry, assuming that the regulator finally approves one or more of them in days to come.
This role could revolve around creating and redeeming ETF shares, according to reports, and it would ensure that the ETFs trade closely with their underlying assets.
For the moment, the bank has not yet confirmed nor denied that it is in talks with the asset managers. But, if the talks end up being successful, Goldman will join a number of other financial giants who have already positioned themselves as APs for various Bitcoin ETFs awaiting approval, including Jane Street, Cantor Fitzgerald, and JPMorgan Chase.
JPMorgan is aligned with the world’s largest asset manager, BlackRock, which also teamed up with a quantitative trading company, Jane Street. Jane Street is also aligned with another ETF applicant called Valkyrie, which also named Canto Fitzgerald as its AP.
The partnerships are quite interconnected, but they are all crucial for the asset managers who are not legally in the right position to pursue cryptocurrency or launch crypto-related products directly.
Is Bitcoin spot ETF finally going to see approval in the US?
With the major US banks getting involved, the pursuit of the Bitcoin spot ETF approval might be nearing its end. At least, many believe that this is the case, as the big banks have always been extremely cautious when it came to dealing with cryptocurrencies, crypto firms, and crypto-related products. Their involvement suggests that they are likely aware of the major shift on the horizon — one that they cannot afford to miss.
The change is partially attributed to the fact that ETF applicants have adopted cash-based mechanisms for handling the bitcoin backing the shares, which was crucial in order for the SEC to grant its approval to any specific ETF filing.
Late in 2023, the SEC met with the representatives of multiple applicant companies their lawyers, and issuers involved with the ETFs. During the meetings, the SEC told them that only applicants who fully completed and filed by the deadline would be considered in the initial round of approvals, which is expected to come in early to mid-January 2024. The filers spent the last days of 2023 trying to implement the new changes before the deadline, including the switch to the cash redemption model. Now, all that remains is to await the SEC’s decision.
