BlackRock Bolsters Bitcoin ETF with Four Wall Street Powerhouses as APs

BlackRock's spot Bitcoin ETF has expanded its authorized participants (APs) to include Citi, Citadel, Goldman Sachs, and UBS, bringing the total to nine APs. The move comes as several asset managers have submitted amended Forms S-1 to the SEC for their Bitcoin ETF applications, marking the final step in the approval process. These amendments provide insights into sponsor fees and strategic adjustments, with BlackRock setting its sponsor fee at 0.3% and VanEck opting for a low permanent fee of 0.25%. The addition of APs and the surge of amendments indicate a significant progression in the journey towards spot Bitcoin ETFs in the US.

BlackRock Bolsters Spot Bitcoin ETF with Addition of Four Wall Street Firms as Authorized Participants

In a significant development, BlackRock, the world's largest asset manager, has expanded its network of authorized participants (APs) for its spot Bitcoin exchange-traded fund (ETF) by adding four prominent Wall Street firms: Citi, Citadel, Goldman Sachs, and UBS. This expansion raises the total number of APs for BlackRock's Bitcoin-based fund to nine, strengthening its liquidity and trading ecosystem.

Amendment Reveals Updated Details of BlackRock's Bitcoin ETF

The addition of these APs was disclosed through an amendment filed with the Securities and Exchange Commission (SEC) on April 5. The amendment provides insights into the latest developments surrounding BlackRock's spot Bitcoin ETF offering.

Surge in Amended Bitcoin ETF Applications

BlackRock's announcement comes amidst a flurry of activity in the Bitcoin ETF market, with several other firms submitting amended filings for their own spot Bitcoin ETF applications. On January 8, industry leaders such as Ark Invest/21Shares, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie filed amended S-1 forms with the SEC, representing a critical step in the approval process.

Sponsor Fees and Strategic Adjustments

The amended filings shed light on the financial structures supporting these potential spot Bitcoin ETFs. BlackRock has set its sponsor fee at 0.3%, with a reduced rate of 0.2% for the initial year or until the ETF reaches $5 billion in assets. VanEck has opted for one of the lowest permanent fees among issuers at 0.25%, while WisdomTree has chosen a higher fee of 0.5%. Notably, Ark Invest and 21Shares have announced a waiver of their 0.25% fee for the first $1 billion in transactions.

Role of Authorized Participants in ETF Market

Authorized participants play a crucial role in the ETF market, ensuring liquidity by creating and redeeming ETF shares in response to market demand. This process helps maintain ETF prices closely aligned with the net asset value of the underlying assets. APs typically procure the necessary assets to create ETF shares and receive a package of shares in return, known as a creation unit.

Significance of BlackRock's AP Selection

BlackRock's decision to expand its AP network, coupled with the surge in amended applications for spot Bitcoin ETFs, signals a significant advancement in the development of these products in the United States. The coming weeks and months will be pivotal in determining the fate of these applications and their potential impact on the cryptocurrency market.

SEC's Public Comment Phase for Ethereum ETFs

In a related development, the SEC has initiated a public comment phase for three proposed Ethereum spot ETFs, marking a crucial step in the potential approval process for these offerings. Grayscale Investments, Fidelity, and Bitwise are each submitting proposals for these ETFs.

Analysts' Outlook on Ethereum ETFs

While optimism surrounds Bitcoin ETF approvals, analysts remain cautious about the approval of Ethereum ETFs. They cite the SEC's historical resistance to such offerings and the complexity surrounding Ethereum's classification as a security. SEC Chairman Gary Gensler's comments that Bitcoin ETF approval did not extend to other crypto assets have also raised uncertainty.

Stakeholders Advocate for Ethereum-Based Products

Despite the potential delay in Ethereum ETF approvals, industry stakeholders like ConsenSys are advocating for the approval and mainstream adoption of Ethereum-based offerings. They emphasize the robust security measures inherent in Ethereum's design, arguing that these measures address regulatory concerns and facilitate the approval process.

Conclusion

The addition of authorized participants to BlackRock's spot Bitcoin ETF and the surge in amended Bitcoin ETF applications highlight the increasing momentum behind these products in the United States. The SEC's public comment phase for Ethereum ETFs marks another step in the regulatory landscape for cryptocurrency-based financial offerings. As the industry awaits the outcome of these applications, the coming weeks and months will provide a clearer picture of the future of these products and their potential impact on the wider cryptocurrency market.