Key Points

• BlackRock has revealed that Citi, Goldman Sachs, UBS, and Citadel are now part of the list of authorized participants for its iShares Bitcoin Trust ETF.
• These firms have joined JP Morgan and Jane Street as authorized participants for the ETF.

Four Wall Street firms, namely Citi, Goldman Sachs, UBS, and Citadel, were recently added to BlackRock's list of authorized participants for the iShares Bitcoin Trust ETF. This announcement was made through an amendment to the ETF's Form S-1, which was submitted to the SEC. JP Morgan and Jane Street were existing participants before the inclusion of these new firms.

Role of Authorized Participants

Authorized Participants (APs) are responsible for purchasing the underlying assets of an ETF, such as Bitcoin in this case, to create shares and maintain liquidity in the ETF market. A typical US-listed ETF has around 24 contracted APs and five active APs, as stated on BlackRock's official website. The exact timing of when these firms were recognized as authorized participants remains unclear as BlackRock has not provided any further comments.

Change in Attitude Towards Cryptocurrency?

Eric Balchunas, a senior ETF analyst at Bloomberg, has suggested that these firms may have been providing liquidity for the ETFs without public disclosure due to negative connotations surrounding the cryptocurrency industry. By publicly acknowledging their roles as APs, it signals a potential shift in their perspectives towards the industry. Balchunas speculates that the success of the ETFs may have influenced these firms to come forward. With the increase in Bitcoin's price and growing investor interest in crypto, institutional investors are showing more interest in participating in spot Bitcoin ETFs. As of last Thursday, the total trading volume of these funds was estimated at around $190 billion.

The rise in popularity of spot Bitcoin ETFs parallels the increase in the price of Bitcoin itself. Since the regulatory approval of the first batch of spot Bitcoin ETF applications in the U.S., the price of Bitcoin has surged by over 40%.