"Hmm, what is Goldman Sachs' real aim in joining hands with these two giant firms?"
While awaiting approval from the Securities and Exchange Commission (SEC), Goldman Sachs is in talks to seal an agreement with BlackRock and Grayscale to serve as an “authorized participant” (AP)* in the Bitcoin (BTC) ETF market.
*A financial institution, usually a bank, that manages the dynamic creation and redemption of ETF shares in the primary market.
As an authorized participant, Goldman Sachs will perform the central ETF industry function of holding ETF shares with their underlying assets which involves the creation and redemption of ETF shares to ensure their market value appropriately reflects the value of their assets.
The move will place Goldman Sachs alongside other major financial entities such as JPMorgan Chase, Jane Street and Cantor Fitzgerald who have also announced their inclusion as APs for various BTC ETFs.
The entry of major US banks into the crypto sector has been made easier by the shift towards cash-based mechanisms for controlling shares of BTC-backed ETFs.
The approach is seen as a key factor in gaining SEC approval following significant adjustments by traditional finance looking to meet regulatory requirements in the crypto world.
However, Goldman Sachs has not yet issued an official statement regarding the discussion and neither does BlackRock, including Grayscale, which still chooses not to comment on the matter.
Nonetheless, the financial community is impatient for further developments following the negotiations which could mark a significant milestone in integrating digital assets into mainstream financial products.
