BlackRock Adds Citi, Goldman Sachs, and UBS to its Bitcoin ETFs
It is no longer a secret that there is increasing interest in crypto assets among traditional institutional players
April 6, 2024 12:31 PM
Reading time: 2 minutes, 4 seconds
TL;DR BlackRock Inc. has announced a significant expansion in the liquidity of its IBIT Bitcoin ETF by adding five new Authorized Participants, bringing the total to nine. This move signals a growing traditional interest in Bitcoin and could enhance the trust in regulated crypto products. The addition includes major financial institutions aiming to improve the ETF's liquidity and market performance.
BlackRock Boosts IBIT ETF Liquidity
BlackRock Inc. has taken a bold step towards increasing the liquidity of its IBIT spot Bitcoin exchange-traded fund (ETF) by filing with the United States Securities and Exchange Commission (SEC) to add five new Authorized Participants (APs).
This expansion raises the total number of APs to nine, incorporating notable names such as Citadel Securities LLC, Goldman Sachs & Co. LLC, ABN AMRO Clearing USA LLC, Citigroup Global Markets, Inc., and UBS Securities LLC into the fold. They join the ranks of existing participants like JP Morgan Securities LLC, Jane Street Capital, Virtu Americas LLC, and Macquarie Capital (USA) Inc.
The Role of Authorized Participants
APs play a crucial role in the ETF ecosystem. As financial institutions, they are tasked with the creation and redemption of ETF shares, directly influencing the fund's liquidity. The mechanism they employ allows for the adjustment of share quantities in response to market demands, ensuring a stable and healthy market presence for the ETF. The inclusion of these new APs is anticipated to significantly enhance the liquidity and market performance of the IBIT ETF.
"Adding multiple APs is expected to increase liquidity for BlackRock's ETF shares."
BlackRock's Growing Crypto Influence
BlackRock's foray into the crypto sector has been marked by notable successes, with the IBIT ETF showcasing impressive performance metrics since its inception.
The addition of these new APs not only underscores a growing interest from traditional financial institutions in Bitcoin but also reflects a broadening acceptance of regulated crypto products. This move could potentially pave the way for more traditional investors to explore the crypto market through familiar and regulated avenues.
Comparative Market Performance
The IBIT ETF has demonstrated remarkable market performance, with Assets Under Management (AUM) soaring to $17.24 billion. This places it second only to Grayscale's GBTC. In contrast, competitors like VanEck's ETF, despite waiving management fees, have struggled to achieve similar levels of market traction.
This disparity highlights the significance of BlackRock's strategic moves and the potential impact of the newly added APs on IBIT's future market performance.
Innovation Beyond Bitcoin
BlackRock's innovation extends beyond Bitcoin ETFs. The launch of the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum Network marks another significant milestone. This tokenized fund aims to provide investors with a stable and secure means to earn dollar yields on digital assets.
With an initial inflow of $160 million, BUIDL's success further cements BlackRock's position as a leading figure in the integration of traditional finance and digital asset markets.
