“We are always looking for new opportunities to serve our clients and the market,” said a spokesperson for Goldman Sachs Group Inc., the prominent Wall Street firm that is poised to become a key player in the bitcoin ETF market.
A Market Maker for ETFs
The bank is in discussions with BlackRock Inc. and Grayscale Investments LLC, two of the leading asset managers in the cryptocurrency space, to act as an authorized participant (AP) for their proposed exchange-traded funds (ETFs), according to people familiar with the matter.
An AP is a market maker that creates and redeems ETF shares to ensure the products trade in line with their underlying assets, which in this case would be bitcoin. APs play a vital role in providing liquidity and efficiency to the ETF market.
A Frorenunner in Institutional Crypto Adoption
Goldman Sachs, which already offers bitcoin futures and options trading to its clients, is one of the few Wall Street institutions that has embraced the cryptocurrency. The bank recently launched a bitcoin derivatives product for institutional investors, and is reportedly considering launching its own bitcoin ETF.
“Goldman Sachs has been at the forefront of innovation in the crypto space, and we are excited to partner with them as we seek to bring our bitcoin ETF to the market,” said Michael Sonnenshein, the CEO of Grayscale, which currently operates the largest bitcoin trust in the world.
Bitcoin Spot ETF Approval Still Pending
BlackRock and Grayscale are among the several firms that have filed applications with the U.S. Securities and Exchange Commission (SEC) to offer bitcoin ETFs, which would allow investors to gain exposure to the digital asset without having to buy or store it directly. The SEC has yet to approve any bitcoin ETFs, citing concerns over market manipulation, fraud, and investor protection.
The sources, who asked not to be identified because the talks are private, said the negotiations are ongoing and no final decision has been made. Goldman Sachs, BlackRock, and Grayscale declined to comment.