ABN AMRO, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities are among the newest members of BlackRock.
On April 5, global asset manager BlackRock added five major Wall Street firms as additional authorized participants to its Bitcoin exchange-traded fund (ETF) prospectus.
The document that modifies BlackRock’s S-1 registration statement with the US Securities and Exchange Commission lists ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities as new members.
Virtu Americas, Macquarie Capital, Jane Street Capital, and JPMorgan Securities are a few of the previously approved ETF participants.
Because they can issue and redeem ETF shares, which entails trading them for cash or a matching basket of securities reflecting the ETF’s holdings, authorized participants are essential to the functioning of the BTC ETF.
The latest additions suggest that “big-time firms now want a piece of the action and/or are now OK being publicly associated with this,” according to Eric Balchunas, an analyst for Bloomberg.
The main goal of the SEC’s stance on a cash generation and redemption mechanism for Bitcoin ETFs was to reduce the possibility of transactions involving market manipulation. The cash mechanism means that, unlike the traditional in-kind model, where market participants handle the underlying assets directly, new shares of a Bitcoin ETF will only be produced or redeemed through cash transactions.
Initial suggestions from asset managers, such as Hashdex, stated that this strategy was created to stop intraday price manipulation. Other asset managers, including industry titans BlackRock, ARK Invest, and Grayscale, have included this method in their disclosures as a result of the SEC’s guidance.
Although the trading volume of Bitcoin ETFs increased to $111 billion in March, some studies indicate that the product’s demand is declining. Trading volume and assets under management are still dominated by BlackRock’s iShares Bitcoin Trust (IBIT), which is followed by funds from Grayscale and Fidelity. BitMEX Research data indicates that as of April 1, BlackRock’s IBIT holdings totaled $17.6 billion.
