In a dramatic turn of events, corporations have shown a keen interest in entering the Bitcoin market. BlackRock, a prominent global asset manager, recently made amendments to its S-1 registration statement with the U.S. SEC, adding five major Wall Street companies as additional permitted participants to its Bitcoin exchange-traded fund (ETF) prospectus. The new members include ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities. This comes in addition to the already permitted participants such as 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 through trading ETF shares for cash or a basket of assets reflecting the ETF’s holdings. Bloomberg analyst Eric Balchunas believes that the inclusion of these major corporations indicates their interest in getting involved in the Bitcoin market or their comfort in being publicly associated with it.
The SEC’s focus on a Bitcoin ETF cash creation and redemption structure is primarily aimed at reducing the risks of market manipulation in transactions. Unlike the traditional in-kind paradigm, where market participants directly deal with the underlying assets, the cash mechanism states that new Bitcoin ETF shares can only be issued or redeemed through cash transactions. Asset managers like Hashdex initially suggested this method to avoid intraday price manipulation. Following instructions from the SEC, major fund managers such as BlackRock, ARK Invest, and Grayscale have also incorporated this method into their filings.
In other crypto news, analysts predict that Ripple (XRP) is poised for exponential growth, with expectations of a $3 to $5 surge in its value.
