BlackRock Tweaks Bitcoin ETF to Allow Wall Street Banks as Liquidity Providers
• BlackRock recently changed its proposed Bitcoin ETF to allow authorized participants (APs) to create shares with cash rather than just crypto.
• This opens the door for large Wall Street banks to play a key role as APs, as they can't directly hold crypto.
• Banks could act as APs and provide the cash that is exchanged into Bitcoin by an intermediary and held in custody.
• This broadens the pool of potential liquidity providers beyond crypto trading firms like Jane Street.
• Large bank balance sheets could significantly increase liquidity supporting the ETF shares when they trade.