Grayscale’s Potential Refiling for Bitcoin ETF
Grayscale Investments CEO, Michael Sonnenshein, is uncertain whether the company needs to refile its application for a spot bitcoin ETF with the SEC. The United States appeals court overturned the SEC’s block on Grayscale’s proposed ETF, stating that the agency’s denial was “arbitrary and capricious.” Sonnenshein mentioned that they will wait for the final mandate from the court before deciding on a potential refiling. The SEC has 45 days to request a rehearing, and the court will issue further directives after this period.
- The SEC’s denial of Grayscale’s proposal was deemed “arbitrary and capricious” by the appeals court.
- The SEC has 45 days to request a rehearing and the court will issue a final mandate.
- Grayscale could either convert GBTC to an ETF, face denial for other reasons, or force the closure of existing futures-based bitcoin ETFs.
- The market reacted positively to the court’s decision, with GBTC discount narrowing and bitcoin’s value surging.
- Grayscale’s victory could have broader implications for pending spot bitcoin ETF applications.
Market Reaction and GBTC Conversion
The market reacted positively to the court’s decision, with GBTC’s discount to net asset value narrowing and bitcoin’s value surging. However, GBTC fell back the following day as the market assessed the potential for conversion. Bloomberg analyst James Seyffart noted that the market is more confident in conversion today but not completely convinced. Grayscale’s potential refiling is uncertain due to the higher fee charged by GBTC compared to typical ETF charges, although Sonnenshein reiterated their commitment to lowering fees when GBTC converts to an ETF.
Broader Implications for Spot Bitcoin ETFs
Grayscale’s legal victory could have broader implications for upcoming spot bitcoin ETF applications. Deadlines for the SEC’s decision on proposals from BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie are approaching. Sonnenshein believes that there should not be any further grounds for the SEC to continue denying these types of products from coming to the market. Bloomberg analysts now estimate a 75% probability of a spot bitcoin ETF launching in 2023, with it being almost a “done deal” by the end of 2024.
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