April 23, 2024

BlackRock designates JPMorgan, Jane Street as Bitcoin ETF authorized participants

BlackRock disclosed JPMorgan Securities and Jane Street as intended participants for its proposed Bitcoin ETF before the SEC decision.

The asset management giant is set to collaborate with the participants, pending approval from the Securities and Exchange Commission (SEC).

Authorized participants play a crucial role in ETF operations, as they can create and redeem shares. This involves exchanging ETF shares for a corresponding basket of securities mirroring the fund’s holdings or opting for a cash exchange. The disclosure of these authorized participants is considered a pivotal step before the SEC decides.

JPMorgan CEO Jamie Dimon has previously advocated for a government ban on cryptocurrencies, citing concerns about their legitimacy. But with JPMorgan being an intended participant in the Bitcoin ETF, Dimon’s words contradict his previous statements.

According to analysts from Bloomberg Intelligence, such as James Seyffart and Eric Balchunas, the SEC is poised to approve spot Bitcoin ETF proposals that commit to cash-only creations and redemptions, provided they have agreements with authorized participants. The likelihood of SEC approval stands at 90%, with expectations of some firms launching a spot Bitcoin ETF in early January.

As the SEC faces a Jan. 10 deadline for a decision on proposals by ARK Invest and 21Shares, market watchers anticipate potential developments in the emerging Bitcoin ETF landscape. Despite refilings by firms like ARK, 21Shares, and VanEck, authorized participants have yet to be named, signaling that firms may disclose this information when filing their effective prospectus, marking the final step before going live.

Grayscale Investments, in a June 2022 report, had previously indicated intentions to work with Jane Street and Virtu Financial if its Grayscale Bitcoin Trust (GBTC) converted to an ETF, but recent filings have not confirmed these participants.

Valkyrie names Cantor Fitzgerald, Jane Street as APs

In a recent update, Valkyrie filed another amended S-1 for their Bitcoin ETF, revealing Jane Street and Cantor Fitzgerald as their authorized participants. This move is significant, as it signals a potential floodgates opening in the Bitcoin ETF industry.

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