Goldman Sachs in Discussion to Become Key Player in BlackRock and Grayscale’s Proposed Bitcoin ETFs

Goldman Sachs in Discussion to Become Key Player in BlackRock and Grayscale’s Proposed Bitcoin ETFs

Crypto News – Goldman Sachs is reportedly in advanced discussions to assume a pivotal role as an “authorized participant” in the Bitcoin ETFs proposed by BlackRock and Grayscale, pending SEC approval. This information comes from sources with knowledge of the matter who chose to remain anonymous.

As a prominent Wall Street investment bank, Goldman Sachs appears poised to play a significant role in the launch of these Bitcoin ETFs in the United States. The role of an authorized participant, or AP, is crucial in the ETF industry, valued at several trillion dollars. This role entails the creation and redemption of ETF shares, ensuring they align precisely with the value of their underlying assets.

If these talks materialize, Goldman Sachs will join other financial heavyweights like JPMorgan Chase, Jane Street, and Cantor Fitzgerald, who have recently been selected as APs for various companies eager to launch Bitcoin ETFs in the U.S., pending regulatory approval.

The sector anticipates more prominent names to emerge in this arena, with the current players being some of the most influential in U.S. finance. An insider from a major trading firm anticipates each Bitcoin ETF could have between five to ten APs.

Traditionally, major U.S. banks have steered clear of direct involvement with cryptocurrencies. However, they are now poised to enter the burgeoning Bitcoin ETF space. This shift is largely attributed to the introduction of a cash-based method for managing the Bitcoin backing the shares, a strategy seen as crucial to gaining SEC approval.

The companies Goldman Sachs aims to collaborate with are substantial forces in the finance world. BlackRock is the largest asset manager globally, while Grayscale operates the Grayscale Bitcoin Trust, a $26 billion fund and the largest Bitcoin investment vehicle to date. Currently structured as a trust, Grayscale intends to transform it into an ETF for more efficient trading.