Goldman Sachs Targets Bitcoin ETF Role with BlackRock and Grayscale

• Goldman Sachs Set to Play Crucial Part in Bitcoin ETFs for BlackRock and Grayscale
• Finance Giants Taking on Authorized Participant Role
• Additional Participants Expected to Emerge
• Big U.S. Banks Venturing into Cryptocurrency ETFs
• Goldman Sachs Seeks Partnership with Major Players

Goldman Sachs Set to Play Crucial Part in Bitcoin ETFs for BlackRock and Grayscale

Goldman Sachs, a leading Wall Street investment corporation, is expected to assume a significant role in the Bitcoin$42,260 -0.64% Exchange Traded Funds (ETFs) that BlackRock and Grayscale plan to launch in the U.S., according to anonymous sources familiar with the matter. The firm is currently in negotiation to become an authorized participant, a pivotal position in the multi-trillion-dollar ETF industry. This role encompasses the creation and redemption of ETF shares, ensuring that the products' trade reflects their underlying assets accurately.

Finance Giants Taking on Authorized Participant Role

Joining the likes of JPMorgan Chase, Jane Street and Cantor Fitzgerald, Goldman Sachs would become one of the financial powerhouses taking on the authorized participant role. Just a week ago, it was disclosed that these companies would fulfill the authorized participant responsibility for a handful out of around a dozen firms that are seeking permission from the Securities and Exchange Commission (SEC) to offer Bitcoin ETFs in the U.S.

Additional Participants Expected to Emerge

It is anticipated that there will be more participants in the race, with the currently revealed names ranking among the largest firms in U.S. finance. A source at a leading trading firm anticipates that each Bitcoin ETF will ultimately have between five to ten authorized participants.

Big U.S. Banks Venturing into Cryptocurrency ETFs

Traditionally, big U.S. banks have kept their distance from cryptocurrencies. However, the adoption of a cash-based mechanism for managing the Bitcoin backing the shares has presented an opportunity to join in the prospective Bitcoin ETF party. The mechanism is deemed a crucial factor in winning SEC approval.

Goldman Sachs Seeks Partnership with Major Players

The firms that Goldman Sachs is looking to collaborate with are significant players in the industry. BlackRock is currently the world's largest asset manager, and Grayscale manages the $26 billion Grayscale Bitcoin Trust, the most substantial Bitcoin investment vehicle. Despite being structured as a trust, Grayscale plans to convert its product into a more manageable ETF.

Last year, Grayscale, having won a significant court battle against the SEC that paved the way for upgrading its Bitcoin trust into an ETF, named market makers Jane Street and Virtu Financial as proposed authorized participants when the transition time arrives.

As of now, Goldman Sachs has not responded to requests for comments. Both BlackRock and Grayscale have declined to comment.

Edited by Jonathan Stoker