Goldman Sachs Set to Become Authorized Participant in BlackRock and Grayscale’s Bitcoin ETFs: Report

Goldman Sachs is expected to be the latest financial institution to take on the role of authorized participant (AP)  in two key Bitcoin ETFs, according to a new report.

Traditional finance’s adoption of crypto

The report, published by CoinDesk early Wednesday afternoon, claims insider sources allege that the investment bank is looking to play a prominent role in both BlackRock and Grayscale’s potential upcoming Bitcoin ETFs.

Should Goldman Sachs go on to become an AP for the hopeful Bitcoin ETFs, they would join a number of firms including Jane Street, JPMorgan, and Cantor Fitzgerald who have already expressed interest in serving as APs for Bitcoin ETF applicants themselves.

News of Goldman Sachs’ interest in the Bitcoin ETF realm follows shortly after the cryptocurrency experienced a turbulent morning which saw its value drop by an estimated 8%. 

A turbulent morning

The sudden dip in Bitcoin’s value came amidst a new report from investment services provider Matrixport which suggested the U.S. Securities and Exchange Commission (SEC) would come to reject all spot Bitcoin ETF hopefuls.

“While we have seen frequent meetings between the ETF applicants and staff from the SEC, which resulted in the applicants refiling their applications, we believe all applications fall short of a critical requirement that must be met before the SEC approves,” the Matrixport analysis states. “This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January.”

The organization’s report prompted a wave of backlash across social media, with many users calling for an investigation into the investment services provider for market manipulation. 

While on holiday, I have more time than usual for writing.

Matrixport, a small private firm based in Asia, is a considerable distance from New York, requiring a 17-hour and 55-minute flight. We don't receive insider information from U.S. regulators. To the best of my knowledge,…

— Jihan Wu (@JihanWu) January 3, 2024

Spot Bitcoin ETF approval timeline is still unclear

“It’s unrealistic to believe that a Matrixport report could trigger a trillion $ size market to crash,” Matrixport co-founder Jihan Wu posted to X. “If someone attributes a flash crash to our report, I suggest examining the analysts’ expertise more closely.”

Wu went on to cite “bearish views on X” and “an unexpected drop in crypto stocks for consecutive trading days” as seemingly additional potential factors in Bitcoin’s drop in value.

Moreover, the cryptocurrency was able to slightly recover, with its trading value hovering around a 5% decrease at the time this publication was released.

Overall, Goldman Sachs’ willingness to partake in the crypto industry as an AP alongside other investment banks signals a potential pathway for greater mainstream adoption of cryptocurrency. 

However, it remains unclear when or if a spot Bitcoin ETF will be approved.