Crypto asset manager Grayscale Investments is reportedly in talks with firms, including JPMorgan and Goldman Sachs, about a potential role in its proposed spot Bitcoin exchange-traded fund (ETF).

Bloomberg reported on Jan. 4 that Grayscale held talks with both investment banks for the role, citing sources familiar with the matter. It comes less than a week after Grayscale filed an amended S-3 application with the United States Securities and Exchange Commission but didn’t list any authorized participants.

Meanwhile, an earlier media report also suggests Goldman Sachs is in discussion with BlackRock to act as an authorized participant for its ETF, citing sources familiar with the matter.

BlackRock previously amended its S-1 filing to name quantitative trading firm Jane Street and JPMorgan as authorized participants in its proposed ETF.  

An authorized participant plays a key role in managing an ETF, as it facilitates the creation and redemption of shares in the fund. An ETF issuer can name multiple financial firms to act as authorized participants.

Notably, ETF applicants aren’t required to name authorized participants in their S-1 or S-3 filings, meaning that other financial firms could still come on board.

While JPMorgan has already been named as an authorized participant for several proposed spot Bitcoin ETFs, Goldman Sachs could join other Wall Street giants, including Cantor Fitzgerald and Jane Street, which have been given an authorized participant role for other ETF issuers.

Goldman Sachs has historically held a neutral stance toward cryptocurrencies and the digital asset sector. In a Dec. 27 interview with Fox Business, Goldman’s head of digital assets, Matthew McDermott, said that a Bitcoin ETF approval would help the crypto market mature and invite increased institutional investment into digital assets more broadly.

A spot Bitcoin ETF has never been approved in the United States. However, ETF analysts predict the likelihood of approval is 90% before Jan. 10.

There are currently 14 asset managers are looking to issue a spot Bitcoin ETF, which would provide institutional investors with direct and regulated exposure to Bitcoin in the United States.

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