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BlackRock Expands Authorized Participants for Spot Bitcoin ETF, SEC Initiates Ethereum ETF Feedback Phase

BlackRock, the world’s largest asset manager, has bolstered its spot Bitcoin ETF by adding four new Wall Street firms as authorized participants (APs), bringing the total number of APs to nine.

The newly added firms include Citi, Citadel, Goldman Sachs, and UBS, as revealed in an amendment to the ETF’s Form S-1 submitted to the Securities and Exchange Commission (SEC) on April 5.

This move follows BlackRock’s submission of an amended S-1 form, alongside other key players in the financial industry, for its spot Bitcoin ETF application to the SEC on January 8. The amendment disclosed sponsor fees and strategic adjustments, providing insights into the financial structures supporting potential spot Bitcoin ETFs.

An authorized participant (AP) is typically a large bank or investment firm designated by an ETF issuer to issue and redeem shares of exchange-traded funds (ETFs). APs play a pivotal role in ensuring liquidity in the ETF market by creating and redeeming ETF shares according to market demand.

BlackRock’s selection of additional APs underscores a significant advancement in the U.S. Bitcoin ETF journey, signaling growing interest from traditional financial institutions in cryptocurrency-based financial products.

In parallel, the SEC initiated a public comment phase for three proposed Ethereum spot ETFs on April 4, marking a crucial step in the potential approval process for these offerings. Grayscale Investments, Fidelity, and Bitwise are among the applicants for these ETF proposals.

While the approval of Bitcoin ETFs by the SEC has generated optimism, analysts are cautious about the prospects of Ethereum ETF approvals. They cite historical resistance from the SEC and the complexity surrounding Ethereum’s classification as a security as potential obstacles.

Despite the uncertainty, stakeholders, including ConsenSys, have advocated for the approval and mainstream adoption of Ethereum-based offerings. They highlight Ethereum’s robust security measures to address regulatory concerns and facilitate the approval process, viewing it as an opportunity for broader crypto asset adoption in traditional finance.

The forthcoming weeks and months will be critical in determining the fate of both Bitcoin and Ethereum ETF applications and their potential impact on the cryptocurrency market.

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