In the US exchange-traded fund (ETF) market, valued at approximately $8 trillion, a significant development is the planned introduction of Bitcoin ETF. This market is currently dominated by three large companies: Bank of America, Goldman Sachs and JPMorgan, known as authorized participants (AP). These entities are crucial to maintaining liquidity and efficient operations in the ETFs. However, the limited number of APs in this rapidly expanding market has led to a concentration of control, which could have profound implications for the emerging Bitcoin ETF.
Bitcoin ETF and market control
With the expected launch of a Bitcoin ETF In 2024, the influence of these three major APs will become increasingly important. They oversee a large portion of the ETF market, which could create specific challenges in this new sector, particularly due to the fluctuating nature of cryptocurrencies. How these companies handle large transactions and ensure consistent cash flow will be key to the stability and effectiveness of the Bitcoin ETF.