Grayscale Negotiating With JPMorgan, Goldman Sachs for Potential Spot Bitcoin ETF Role

If approved, Grayscale's ETF will mark a significant milestone for the cryptocurrency market, attracting increased institutional investment and fostering the maturation of digital assets.

Crypto asset manager Grayscale Investments is reportedly exploring partnerships with top-tier firms, such as JPMorgan and Goldman Sachs, for potential roles in its proposed spot Bitcoin exchange-traded fund (ETF). JPMorgan has already been named an authorized participant for several proposed spot Bitcoin ETFs.

Meanwhile, Goldman Sachs may join the ranks of other Wall Street giants, including Cantor Fitzgerald and Jane Street, designated as authorized participants for other ETF issuers.

Grayscale's Talks With Investment Banks

According to Bloomberg, sources familiar with the matter revealed that Grayscale has held talks with both JPMorgan and Goldman Sachs concerning their involvement in the role. These discussions come shortly after Grayscale recently filed an amended S-3 application with the United States Securities and Exchange Commission. The filing did not list any authorized participants, as per Cointelegraph.

A previous media report indicates that Goldman Sachs also engages in discussions with BlackRock. The talks revolve around BlackRock potentially acting as an authorized participant for Goldman Sachs' ETF, as cited by insiders close to the matter.

An authorized participant plays a crucial role in managing an ETF, facilitating the creation and redemption of shares in the fund. ETF issuers can designate multiple financial firms as authorized participants.

It is worth noting that ETF applicants are not obligated to disclose authorized participants in their S-1 or S-3 filings. This implies that other financial institutions could potentially enter into partnerships as authorized participants in the future.

Matthew McDermott, Goldman's head of digital assets, commented in a recent interview with Fox Business that the approval of a Bitcoin ETF would contribute to the maturation of the crypto market and attract greater institutional investment into digital assets.

Outlook on Spot Bitcoin ETF Approval

A spot Bitcoin ETF has never received approval in the United States. However, ETF analysts are predicting a 90% likelihood of approval before January 10.

Presently, there are 14 asset managers actively seeking approval to issue a spot Bitcoin ETF. Once approved, this product will provide institutional investors in the United States with direct and regulated exposure to Bitcoin.

Photo: BusinessWire

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