BlackRock, the U.S.-based financial institution, announced JP Morgan Securities and Jane Street as its ETF Bitcoin Broker when filing with the Securities and Exchange Commissions on Friday. Blackrock named the two institutions as brokers as the deadline for ETF approval nears in the next 10 days. Moreover, Valkyrie had also appointed Jane Street and Cantor Fitzgerald & Co. for the same role should the SEC approve the spot Bitcoin ETF by January 10th.
However, JP Morgan’s appointment came as a surprise to the crypto community. JP Morgan CEO Jamie Dimon has consistently made it clear that he does not support Bitcoin but rather sees it as a bar of gold without authority while suggesting that it should be banned. However, this move by BlackRock did not go unnoticed, although it increased its chances of getting approval from the SEC by updating its spot-Bitcoin ETF application. This move received several criticisms from various sources.
However, JP Morgan and Jane Street’s choice of BlackRock is a clear move that tends to collaborate with traditional finance. Moreover, both firms are excellent players in trading and custody and major players in traditional finance. Additionally, the authorized firm has emerged as a key point of interest with ongoing talks with the SEC.
Why is Jane Street a Better Choice by the SEC?
Jane Street has been picked by over 3 institutions that have filled spots for Bitcoin ETF applicants: Blackrock, Valkyrie, and Fidelity. Although Jane Street is associated with names that may cause trouble, like FTX founder Sam Bankman, the firm is among the largest market makers. This makes it the best choice for the SEC; additionally, the firm reported a portfolio worth over $300 billion.
Despite the firm being associated with FTX Sam Bankman and Alamanda head of research Caroline Ellison, it was still the best choice, which could increase BlackRock and its rivals in ETF spot-bitcoin approval. Jane Street kept the ETF bond market liquid during the 2020 Covid crash. Therefore, Jane Street remains the best choice for SEC and Spot-Bitcoin ETF applicants.
Broker-dealers serving as authorized participants for ETFs are responsible for handling the creation and redemption of baskets of shares in the fund as well as transfers of cash to and from its administrator. However, the president of ETF, Nate Geraci, stated that “lining up APs won’t exactly be a layup for every prospective issuer, so this was an important step.”