Grayscale, a leading digital asset manager, remains steadfast in its anticipation of the approval of a Bitcoin Exchange-Traded Fund (ETF) in the United States. The company is actively pursuing approval from the U.S. Securities and Exchange Commission (SEC) to convert its Bitcoin Trust (GBTC), currently an open-ended trust on the OTCQX Market, into a spot Bitcoin ETF. If successful, the company’s objective is to list the ETF on the NYSE Arca exchange.
Grayscale addresses questions about Bitcoin ETFs
In addressing common questions about the potential conversion, Grayscale’s Chief Legal Officer, Craig Salm, and Chief Financial Officer, Edward McGee, conveyed optimism. Salm emphasized their belief that the regulatory approval of a spot Bitcoin ETF in the U.S. is not a matter of “if” but “when.” Upon receiving approval, Grayscale intends to collaborate with its partners to promptly uplist GBTC to NYSE Arca. Despite this positive outlook, the company refrained from providing a specific timeline, acknowledging the inherent uncertainty associated with regulatory processes.
However, amid the optimism for a Bitcoin ETF, Grayscale’s predictions are not without a caveat. The company did not offer a projected timeline for the conversion of GBTC, recognizing the unpredictability surrounding regulatory decisions. Analysts, including James Seyffart from Bloomberg Intelligence, have speculated on potential SEC actions, suggesting movement in a window between January 8 and January 10. The year 2022 saw Grayscale taking legal action against the SEC, alleging unfair treatment in rejecting its application to convert GBTC into an ETF.
The long journey towards the approval of a Bitcoin ETF
The conversion would empower the fund to engage in simultaneous creations and redemptions of shares, aligning with real-time Bitcoin prices. Encouragingly, progress has been made, evidenced by a judge’s decision in August compelling the SEC to accept Grayscale’s application. In October, the SEC chose not to appeal the decision and was subsequently ordered to formally review the ETF bid. A memo from the SEC revealed a meeting with Grayscale CEO Michael Sonnenshein and CFO Edward McGee, focusing on “NYSE Arca, Inc.’s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E.”
Despite not yet achieving spot ETF status, GBTC already represents over 3% of the total Bitcoin supply and currently trades at an 8% discount to its net asset value. Grayscale sees the conversion to an ETF structure as a strategic move to more closely track Bitcoin’s price movements. Grayscale maintains an optimistic stance on the approval of a Bitcoin ETF in the U.S., expressing confidence that it is a matter of “when,” not “if.”
While refraining from providing a specific timeline, the company is prepared to uplist GBTC to NYSE Arca swiftly upon regulatory approval. The legal developments, including court decisions and official reviews, reflect Grayscale’s commitment to navigating the regulatory landscape for a potential ETF conversion. As the industry watches closely, the ongoing discussions, progress made, and legal proceedings underscore the significance of Grayscale’s pursuit in shaping the future landscape of Bitcoin investment products.
