The SEC Won’t Challenge Grayscale’s Bitcoin ETF Conversion
On October 13, the U.S. Securities and Exchange Commission (SEC) announced that it will not contest the court ruling allowing Grayscale to convert its GBTC product into a spot Bitcoin exchange-traded fund (ETF). This decision follows the District of Columbia Court of Appeals’ August ruling that the SEC’s rejection of Grayscale’s proposed bitcoin ETF was unjust. Reuters reported that this move by the SEC paves the way for the agency to reconsider Grayscale’s application. According to Bloomberg’s senior ETF analyst James Seyffart, discussions between Grayscale and the SEC will begin next week, with a response expected within two weeks.
Grayscale May Soon Launch Spot Bitcoin ETF
In addition to Grayscale, other major players in the market like BlackRock, Valkyrie, WisdomTree, and Ark Invest have also applied to launch spot Bitcoin ETFs. Bloomberg analysts Eric Balchunas and James Seyffart estimate a 90% chance of approval for a spot Bitcoin ETF by January 2024. This prediction is based on recent amendments to the prospectus submitted by Ark Invest and 21Shares, suggesting positive interactions with the SEC. Balchunas and Seyffart believe there is a high likelihood of approval for Ark’s proposal by their January 10 deadline.
SEC Facilitating Ethereum Futures ETF Approvals
The ongoing dialogue between the SEC and fund sponsors is seen as a positive sign for spot Bitcoin ETF applications. Additionally, Seyffart mentioned that ProShares is preparing to launch the Short ETH Strategy ETF on October 16 as the SEC expedites approvals for Ethereum futures ETFs. Grayscale has also submitted an application for an Ethereum Futures ETF.
Hot Take: Positive Outlook for Bitcoin ETF Approval
With the SEC’s decision not to challenge Grayscale’s Bitcoin ETF conversion and the constructive interactions between the SEC and other fund sponsors, there is growing optimism for the approval of spot Bitcoin ETFs. Industry experts like Balchunas and Seyffart believe there is a high chance of approval by January 2024. These developments indicate a significant step forward for the crypto industry’s efforts to introduce regulated Bitcoin investment products.
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