BlackRock adds Citi, Goldman Sachs and others as spot Bitcoin ETF authorized participants

BlackRock has added four more Wall Street firms as authorized participants (APs) for its spot Bitcoin ETF.

With this addition, the asset manager’s Bitcoin-based fund now boasts a total of nine APs.

BlackRock’s Bitcoin ETF updates

BlackRock, touted as the world’s largest asset manager, now counts Citi, Citadel, Goldman Sachs, and UBS among its APs for its spot Bitcoin ETF offering.

The information was disclosed through an amendment attached to the ETF’s Form S-1 submitted to the Securities and Exchange Commission (SEC) on April 5,

This announcement follows BlackRock and several other firms submitting amended forms for their Bitcoin ETF applications to the SEC.

On Jan. 8, several key players in the financial industry, including BlackRock, Ark Invest/21Shares, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie, filed amended S-1 forms for their spot Bitcoin ETFs with the U.S. SEC. This was considered the final step in the approval process.

The submission of amended S-1 forms revealed sponsor fees and strategic adjustments, providing insight into the financial structures supporting these potential spot Bitcoin ETFs.

BlackRock, for instance, set its sponsor fee at 0.3%, with a reduced rate of 0.2% for the first year or until the ETF reaches $5 billion in assets. VanEck chose one of the lowest permanent fees among issuers at 0.25%, while WisdomTree opted for a higher 0.5% fee.

Additionally, ARK Invest and 21Shares announced they would waive their 0.25% fee for the first $1 billion in transactions.

An AP is typically a large bank or investment firm designated by an ETF issuer to issue and redeem shares of exchange-traded funds (ETFs).

APs are pivotal in the ETF market, ensuring liquidity by creating and redeeming ETF shares according to market demand.

This process helps maintain ETF prices closely aligned with the net asset value of the underlying assets. These entities procure the required underlying assets to create ETF shares and receive a package of shares in return, referred to as a creation unit.

BlackRock’s selection of authorized participants for its spot Bitcoin ETF, alongside the surge of amendments to existing spot BTC ETF applications, indicates a notable advancement in the U.S. Bitcoin ETF journey. The forthcoming weeks and months will carry substantial weight in determining the fate of these applications and their potential ramifications on the cryptocurrency market.

SEC seeks feedback for Ethereum ETFs

On April 4, the SEC initiated a public comment phase for three proposed Ethereum spot ETFs, signaling a crucial step in the potential approval process for these offerings.

Grayscale Investments, Fidelity, and Bitwise are each applying for ETF proposals.

Chatter about an Ethereum ETF has gotten louder ever since the SEC approved spot Bitcoin ETFs. The move reflects the growing interest in cryptocurrency-based financial products among traditional investment firms.

Despite the optimism surrounding Bitcoin ETF approvals, analysts are not as bullish on the approval of Ethereum ETFs, citing the SEC’s historical resistance to such offerings and the complexity surrounding Ethereum’s classification as a security. 

The SEC’s scrutiny of the Ethereum Foundation and Chairman Gary Gensler’s indication that Bitcoin ETF approval did not extend to other crypto assets added to the uncertainty surrounding Ethereum ETF considerations.

While some viewed the potential delay in Ethereum ETF approvals negatively, others saw it as an opportunity for traditional finance to acclimate to Bitcoin, potentially paving the way for smoother adoption of Ethereum-based products.

Stakeholders, including ConsenSys, advocated for the approval and mainstream adoption of Ethereum-based offerings, emphasizing the robust security measures inherent in Ethereum’s design to address regulatory concerns and facilitate the approval process.