BlackRock Bitcoin ETF doubles its APs, signaling increased institutional interest.

BlackRock, the world’s largest asset manager, has made a significant move by adding five more Authorized Participants (APs) for its spot Bitcoin Exchange-Traded Fund (ETF), IBIT. This expansion doubles the total number of APs for BlackRock Bitcoin ETF from four to nine, signaling growing interest from major financial institutions in participating in the Bitcoin market.
Enhancing IBIT’s Liquidity and Accessibility

The latest update to the prospectus reveals the addition of five new APs, including ABN AMRO Clearing USA LLC, Citadel Securities LLC, Citigroup Global Markets, Inc., Goldman Sachs & Co. LLC, and UBS Securities LLC.

The roster of existing APs, as outlined in the previous prospectus, includes JP Morgan Securities LLC, Jane Street Capital LLC, Macquarie Capital (USA) Inc., and Virtu Americas LLC. It also added that the sponsor retains the prerogative to introduce additional APs at its discretion, at any given time.

Renowned Bloomberg Intelligence ETF analyst, Eric Balchunas, commented on this development. He noted that the involvement of such firms signals a rising demand for regulated investment vehicles in the digital asset space.

A Shift in Attitude

Balchunas further noted that, until this point, Citi, GS, UBS, and Citadel had not been specifically identified in any of the ETF filings. This suggests that they are either newly involved or previously hesitant to be publicly associated, but now appear to be embracing their participation. This shift in attitude is likely influenced by the remarkable success and substantial flows experienced by the ETFs.

Notably, Authorized Participants are important in the creation and redemption of ETF shares, facilitating the seamless transfer of cash to and from the Trust Administrator. By enlarging the pool of APs, BlackRock aims to enhance liquidity and accessibility for investors interested in IBIT.
BlackRock Bitcoin ETF’s Success

Launched on January 11, 2024, BlackRock’s spot Bitcoin ETF has garnered substantial attention from investors seeking exposure to Bitcoin without directly owning digital assets. This addition of five more APs comes on the heels of their consistent net inflows for IBIT over the past three months. 

Since its launch, IBIT has attracted over $14 billion in net inflows, surpassing its competitors and solidifying its position as a market leader. Notably, IBIT’s success is mirrored by Fidelity’s Wise Origin Bitcoin Fund (FBTC), which has also experienced significant investor demand.

Even on days when bitcoin’s price declines, these two ETFs continue to attract investor interest, highlighting the resilience and growing acceptance of Bitcoin as an asset class. IBIT’s dominance is evident in its contribution to BlackRock’s net flows year-to-date, accounting for over half of the total inflows across all its ETFs.

Similarly, FBTC has attracted the majority of Fidelity’s total inflows, surpassing its counterparts by a significant margin. As the popularity of spot Bitcoin ETFs grows, the expansion of the AP list represents a positive development for IBIT and the bitcoin market as a whole.