BTC Price Index and Live Chart – CoinDesk”>(BTC) ETF opens the door for Wall Street banks, which face restrictions holding cryptocurrencies, to play a key role.

BlackRock has recently changed to allow authorized participants, a crucial part of the ETF eco-system, to create new funds shares using cash instead of only cryptocurrency.

Due to the fact that highly regulated U.S. Banks are not able to hold bitcoin, this setup would allow firms like JPMorgan and Goldman Sachs with some of largest balance sheets to act as APs for BlackRock’s ETF. It’s not clear if they will.

The SEC is expected to approve spot bitcoin ETFs soon. This could be a game changer for the digital asset industry, if it attracts a flood from retail investors. Until now, it was believed that APs were large market-making companies with experience in cryptocurrency, such as Jane Street and Jump Trading, not banks. The change could mean that banks get a piece of the action and can expand the list of liquidity providers.

In an interview, CF Benchmarks CEO SuiChung stated that if the SEC accepted this revised dual model, which allows for both cash and physical redemption, the liquidity of ETF shares would increase, as there are more potential APs involved in the process. (CF Benchmarks, owned by Kraken, is the benchmarks administrator of several spot bitcoin ETFs including BlackRock’s. “Although trading firms such as Jane Street, etc. Although they are big and experts, the balance sheets of large American banks are trillions of dollars.

Nick Baker is the editor.