Major market makers to provide liquidity for bitcoin-ETFs

Major market makers to provide liquidity for bitcoin-ETFs

Author: Robert Strickland (crypto-journalist)


Major market makers to provide liquidity for bitcoin-ETFs

BlackRock, the investment company, has engaged in discussions with prominent market makers to ensure liquidity for potential Bitcoin ETFs. Specifically, they have been in talks with Jane Street and Jump Trading, two market makers who previously had to cease their activities in the cryptocurrency market due to regulatory pressures earlier this year.


According to reports from CoinDesk, BlackRock has been coordinating with market makers, including Jane Street, Virtu Financial, Jump Trading, and Hudson River Trading, to provide market-making services for trading Bitcoin ETFs if they receive approval from the US regulator. The approval of these ETFs is anticipated to occur shortly.


The significance of a spot Bitcoin ETF lies in its potential to draw substantial assets, much like traditional ETFs such as those focused on gold, which manage trillions of dollars. Even a small portion of these assets has the potential to significantly impact the global cryptocurrency market. If spot Bitcoin ETFs are given the green light, the demand for cryptocurrency is expected to surge. This is because purchasing shares in these funds involves the direct acquisition of Bitcoin, which directly influences its market value.

Recently, both BlackRock and Grayscale filed updated applications for Bitcoin ETFs, and within the crypto community, the launch of these investment products is seen as a catalyst for a new bullish market cycle. Bloomberg Intelligence analysts estimate a high likelihood, around 90%, that the SEC will approve these ETFs in early January 2024.

Earlier in the year, two major market makers, Jump Trading and Jane Street, had to halt their cryptocurrency market operations in the United States due to increased regulatory restrictions. These regulatory pressures were cited as the reason behind their decision. Additionally, Robinhood, a significant holder of Bitcoin among publicly traded companies, terminated its partnership with Jump Trading in the late summer, although the exact reasons for this termination were not disclosed by the companies involved.


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