The recent additions indicate that corporations are now showing interest in joining the Bitcoin ETF market. BlackRock, a prominent global asset manager, has filed an amendment to its S-1 registration statement with the U.S. SEC, adding five major Wall Street companies as additional permitted participants in its Bitcoin ETF prospectus. The newly added members include ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities. Previously permitted participants in the ETF include Virtu Americas, Macquarie Capital, Jane Street Capital, and JPMorgan Securities.
One crucial aspect of the BTC ETF’s operating mechanism is the ability for authorized participants to generate and redeem ETF shares. This can be done by trading ETF shares for cash or a basket of assets reflecting the ETF’s holdings. According to Bloomberg analyst Eric Balchunas, the inclusion of these major corporations demonstrates their interest in getting involved or their comfort in being publicly associated with the Bitcoin ETF.
The SEC’s focus on a cash creation and redemption structure for the Bitcoin ETF aims to mitigate the risks of market manipulation in transactions. Unlike the traditional in-kind model, where market participants directly deal with the underlying assets, the cash mechanism stipulates that new Bitcoin ETF shares can only be issued or redeemed through cash transactions. Asset managers like Hashdex initially recommended this method to avoid intraday price manipulation. Following instructions from the SEC, major fund managers such as BlackRock, ARK Invest, and Grayscale have also adopted this approach in their filings.
In other cryptocurrency news, analysts predict that Ripple (XRP) is poised for exponential growth, with expectations of a surge in value between $3 to $5.