Grayscale executives held a pivotal meeting with the U.S. Securities and Exchange Commission (SEC). The primary focus of this discussion was the potential transformation of Grayscale’s flagship Bitcoin trust into a spot Bitcoin exchange-traded fund (ETF), a move that could have far-reaching implications for the digital asset market.
High-Level discussions with the SEC
The meeting, as detailed in a memo released on November 20, involved Grayscale CEO Michael Sonnenshein, legal chief Craig Salm, ETF head Dave LaValle, and other top executives. Representing the SEC were members of its division of trading and markets. The agenda centered on a proposed rule change by NYSE Arca, Inc. to list and trade shares of the Grayscale Bitcoin Trust (BTC) under a specific NYSE rule.
Grayscale has been laying the groundwork for this transition, as evidenced by its recent agreement with the Bank of New York Mellon (BNY Mellon). This partnership, wherein BNY Mellon will act as the transfer agent for the Grayscale Bitcoin Trust, is essential for the issuance and management of shares and maintaining shareholder accounts.
A strategic push for a Spot Bitcoin ETF
This move by Grayscale is seen as a strategic attempt to capitalize on the burgeoning interest in cryptocurrency investments. ETF analyst James Seyffart from Bloomberg noted that the involvement of the SEC’s trading and markets division is crucial, as this body is responsible for the approval or denial of significant rule changes. Seyffart, however, cautioned that the agreement with BNY Mellon does not necessarily indicate an imminent conversion of the GBTC to an ETF.
Nate Geraci, President of ETF Store, emphasized the importance of Grayscale’s efforts to convert its Bitcoin Trust into a spot ETF. He referred to this process as an “uplisting,” a term that implies a transition without fundamental issues. Geraci highlighted Grayscale’s potential to dominate the ETF category, especially if it manages to uplist GBTC to NYSE Arca concurrently with other issuers launching spot BTC ETFs.
Grayscale’s proactive approach is underscored by their October filing of an S-3 form registration statement with the SEC, signaling their intention to list GBTC shares on the NYSE Arca under the ticker symbol GBTC. This move followed a mandate from a U.S. appellate court instructing the SEC to review its decision on denying Grayscale’s bid for a spot ETF.
