Grayscale Investments, a leading crypto asset manager, is reportedly in discussions with major investment banks JPMorgan and Goldman Sachs regarding a potential role in a proposed spot Bitcoin ETF product. This news comes shortly after Grayscale’s amended S-3 filing with the SEC, which did not list any authorized participants.
Goldman Sachs is also said to be in talks with BlackRock to act as an authorized participant for its own ETF product. Previously, BlackRock had proposed Jane Street and JPMorgan as authorized participants in its ETF application.
An authorized participant plays a crucial role in an ETF by facilitating the creation and redemption of fund shares. ETF issuers can name multiple financial firms to act as authorized participants in their SEC filings, and the absence of such names in S-1 or S-3 filings does not preclude others from taking steps to engage in the ETF process.
While JPMorgan is already named as an authorized participant for several proposed spot Bitcoin ETF services, Goldman Sachs could potentially join other Wall Street giants in this role, including Cantor Fitzgerald and Jane Street.
Goldman Sachs has historically maintained a neutral stance on cryptocurrencies. Matthew McDermott, head of crypto assets at Goldman, stated that a Bitcoin ETF approval would aid in the maturation of the crypto market and attract more institutional investments. Currently, there are 14 asset managers in the United States seeking to issue a spot Bitcoin ETF, which would provide institutional investors with a regulated avenue for direct investment in Bitcoin.