One step closer to official approval! BlackRock and Valkyrie confirm the authorized participants' information for the Bitcoin ETF in spot trading.
BlackRock and Valkyrie Investments have designated broker-dealers as authorized participants for their physically-backed Bitcoin ETFs. This is a significant milestone in the competition to track the original cryptocurrency through ETFs. BlackRock has named Jane Street Capital and J.P. Morgan Securities as authorized participants for its proposed iShares Bitcoin Trust. Valkyrie has also hired Jane Street Capital and Cantor Fitzgerald & Co. for the same role, and may add additional authorized participants. This is an important step towards obtaining approval from US regulatory agencies.
Zhitong App has learned that BlackRock and Valkyrie Investments have both designated broker-dealers who will be responsible for facilitating cash flows in and out if their proposed spot Bitcoin ETFs receive approval from US regulatory agencies. This is a significant milestone in the competition for the first ETF that tracks the original cryptocurrency.
According to a revised prospectus submitted to the US Securities and Exchange Commission (SEC) on Friday, BlackRock has listed Jane Street Capital and JPMorgan Securities as the so-called authorized participants for its proposed iShares Bitcoin Trust. Valkyrie, in another filing, stated that it has also hired Jane Street Capital and Cantor Fitzgerald & Co. for the same role and may add additional authorized participants.
Broker-dealers serving as authorized participants for ETFs are responsible for handling the creation and redemption of baskets of stocks in the fund, as well as cash transfers with the fund manager. Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, stated that while ETF issuers typically have no trouble obtaining authorized participant agreements, some industry participants are concerned that Bitcoin funds will face a more challenging period due to cryptocurrency being a relatively new asset class.
Nate Geraci, President of The ETF Store, said, "Obtaining authorized participant agreements is not something every potential issuer can easily accomplish, so this is an important step. Based on everything we know at this point, BlackRock is the first issuer to meet the SEC's requirements to be considered for inclusion in the first batch of approved spot Bitcoin ETFs."
Bitcoin has risen over 150% cumulatively in 2023, as there is optimism in the market that the SEC will eventually approve an ETF that directly invests in Bitcoin, rather than existing futures-based products. Other Wall Street heavyweights, including Invesco, Franklin Templeton, and Fidelity, have also applied for spot Bitcoin ETFs, while Grayscale Investments has applied to convert its Grayscale Bitcoin Trust (GBTC) into an ETF.
January 10, 2023, will be the final deadline for the SEC to decide whether to approve the spot Bitcoin ETF applications submitted by Cathie Wood's Ark Investment Management LLC and 21Shares.