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BlackRock's Bitcoin ETF Expands Authorized Participants with Wall Street Giants

Goldman, Citi, UBS join BlackRock's Bitcoin ETF as authorized participants

Asset management giant BlackRock (BLK) has expanded the number of authorized participants (APs) for its iShares Bitcoin Trust (IBIT) to nine, as the fund continues to attract significant investments. The addition of five new APs, including prominent Wall Street banks Goldman Sachs, Citigroup, and UBS, as well as Citadel Securities and clearing house ABN AMRO, was disclosed in a recently filed prospectus with the U.S. Securities and Exchange Commission (SEC). These new APs will work alongside the existing four: Jane Street Capital, JP Morgan, Masquarie, and Virtu Americas.

Authorized participants play a crucial role in the ETF ecosystem by facilitating the creation and redemption of fund shares, thereby providing liquidity and ensuring that the fund's price remains close to the underlying asset's value. As the iShares Bitcoin Trust has amassed nearly $18 billion in assets under management within just three months of its launch, the inclusion of additional APs is a strategic move to maintain the fund's efficiency and responsiveness to market demand.

The participation of Goldman Sachs is particularly notable, given the recent comments by the bank's wealth management chief investment officer, who stated that the bank sees no value in cryptocurrencies and feels no pressure to engage in the space. 

This stance contrasts with the actions of other traditional finance giants, such as JPMorgan, whose CEO Jamie Dimon had previously criticized cryptocurrencies but became one of the original APs for BlackRock's IBIT at its launch in January.

As more institutional investors show interest in gaining exposure to Bitcoin through regulated investment vehicles like ETFs, the collaboration between BlackRock and major Wall Street players is expected to further legitimize and streamline the process of investing in cryptocurrencies.