On April 5, global asset manager BlackRock made revisions to its Bitcoin exchange-traded fund (ETF) prospectus, introducing five major Wall Street firms as new authorized participants.

The new members enlisted include ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities, as detailed in the document amending BlackRock’s S-1 registration statement with the United States Securities and Exchange Commission (SEC).

Previously authorized participants in the ETF encompass JPMorgan Securities, Jane Street Capital, Macquarie Capital, and Virtu Americas.

Authorized participants play a pivotal role in the operational mechanism of BTC ETFs, as they are empowered to generate and redeem ETF shares. This process involves exchanging ETF shares for a corresponding basket of securities mirroring the ETF’s holdings or converting them into cash.

Bloomberg analyst Eric Balchunas suggests that the inclusion of these new entities indicates a heightened interest from prominent firms in the Bitcoin ETF market.

The SEC's stance on implementing a cash creation and redemption mechanism for Bitcoin ETFs primarily aims to mitigate the risks of market manipulation associated with transactions. This approach involves the creation or redemption of new shares of a Bitcoin ETF exclusively through cash transactions, diverging from the traditional in-kind model where market participants directly handle the underlying assets. This measure was devised to prevent intraday price manipulation, following initial proposals by asset managers like Hashdex. Subsequently, other major players in the asset management industry, including BlackRock, ARK Invest, and Grayscale, have integrated this mechanism into their filings in accordance with the SEC's guidance.

While Bitcoin ETFs experienced a surge in trading volume in March, reaching $111 billion, some analyses suggest a waning demand for the product. BlackRock's iShares Bitcoin Trust (IBIT) maintains its dominance in trading volume and assets under management, followed by funds from Grayscale and Fidelity. According to data from BitMEX Research, BlackRock's IBIT assets reached $17.6 billion on April 1.