BlackRock Makes It Easy for Wall Street Banks Like Goldman Sachs to Participate in Its Bitcoin Spot ETF

Asset Management Titan Black Rock has reviewed your spot bitcoin Application for ETF (exchange-traded fund) to facilitate the participation of Wall Street banks.

The revised version of the ETF allows the creation of new shares using cash instead of just cryptocurrencies. Under the new agreement, banks will also be able to act as authorized participants of the ETF.

That allows big banks like JPMorgan and Goldman Sachs to bypass restrictions that currently prevent them from holding bitcoin and other cryptocurrencies directly on their balance sheets.

The new model was submitted to the US Securities and Exchange Commission (SEC) on November 28. meeting by six members of BlackRock and three members of Nasdaq.

Under the revised model, authorized participants would transfer cash to a broker-dealer.

This stockbroker will convert cash into bitcoin before storing it at the ETF's custody provider, which BlackRock has specified will be Coinbase Custody.

The model will also shift risk away from authorized participants and more into the hands of market makers.

BlackRock said the new model offers “superior resistance to market manipulation.”

This addresses one of the Securities and Exchange Commission (SEC), which has led the regulator to repeatedly deny all previous bitcoin spot ETF applications.

BlackRock added that the new ETF structure would also strengthen investor protection, while reducing transaction costs and increasing “simplicity and harmonization” across the broader bitcoin ETF ecosystem.

BlackRock's Spot bitcoin ETF Could Open Trillion-Dollar Floodgate

The potential approval of this new model could lead to a substantial increase in investment inflows into the new product.

It allows trillion-dollar Wall Street banks to participate without direct exposure to cryptocurrencies.

Regulations currently prohibit these trillion-dollar banks from adding bitcoin and other cryptocurrencies to their balance sheets.

Prob seeks to get them out of the way, clear the track.

– Eric Balchunas (@EricBalchunas) November 28, 2023

The SEC must make a decision on BlackRock's application by January 15, with the final deadline set for March 15. However, ETF analysts predict that the SEC may reveal its decision on several pending applications between January 5 and 10.

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