YEREVAN (CoinChapter.com) — Grayscale’s Spot Bitcoin ETF application remains under the review of the US Securities and Exchange Commission (SEC). And its top executives are doing everything they can to ensure approval. But will a regulatory shark like Gary Gensler let them run a Bitcoin ETF product on Wall Street? Let’s discuss.
Grayscale Reaches Out To SEC — Again
Grayscale executives, including chief executive Michael Sonnenshein, legal chief Craig Salm, and ETF head Dave LaValle, met with their counterparts in the SEC’s division of trading and markets. Officials from David Polk’s law firm also joined the roundtable.
Why did Grayscale meet the SEC? Maybe to ensure that they have got everything right with their Spot Bitcoin ETF application. For the unversed: Grayscale wants to convert its Bitcoin Trust GBTC to an ETF.
The focus of these discussions was on a proposed rule change to list and trade shares of the Grayscale Bitcoin Trust under NYSE Arca Rule 8.201-E.
Additionally, Grayscale has entered into a Transfer Agency and Service Agreement with BNY Mellon. This agreement appoints BNY Mellon as the agent for the Grayscale Bitcoin Trust, where they will manage the issuance and redemption of shares and maintain shareholder accounts.
It’s noteworthy that the SEC’s trading and markets division is responsible for approving or denying forms 19b-4, which self-regulatory organizations use to inform the SEC of proposed rule changes.
Bloomberg ETF analyst James Seyffart remarked that Grayscale’s agreement with BNY Mellon is a necessary step in the process. However, he hit another KEY argument in the whole spot Bitcoin ETF hype – the discussions do NOT necessarily indicate an imminent conversion of GBTC to an ETF.
Will SEC Approve Grayscale’s Bitcoin ETF?
Nate Geraci, President of the ETF Store, pointed out that the most significant aspect of Grayscale’s meeting with the SEC is that the GBTC ‘conversion’ is being referred to as an ‘uplisting.’ This doesn’t suggest any issues with the conversion to an ETF.
Geraci also highlighted that Grayscale could potentially dominate the ETF category if it manages to uplift GBTC to NYSE Arca simultaneously with other issuers launching spot BTC ETFs, especially if they compete effectively on fees.
Grayscale is poised to enter the market with a substantial $20 billion in assets under management, placing it in a strong position even with other major players like BlackRock.
However, the court order from Aug. 29 simply allowed Grayscale to refile its Bitcoin ETF application, which the company did in mid-October. The SEC can still shoot down the application on whatever grounds it sees fit.
Some market analysts, like Bloomberg ETF analyst James Seyffart, have expressed optimism about the approval of a Bitcoin ETF in the near future. However, these opinions are speculative and should be taken with a grain of salt.
As of Nov. 22, the SEC has delayed several ETF decisions on its desk, such as filings from Franklin Templeton and Global X, till 2024. Thus, market participants shouldn’t rely too much on the current negotiations while making investment decisions.
