Grayscale’s Potential Move to NYSE
In a recent exchange, Nate Geraci, President of the ETF Store, and Scott Johnsson, finance lawyer at Davis Polk, discussed the possibility of Grayscale uplisting its spot Bitcoin ETF to the New York Stock Exchange (NYSE). Geraci suggested that Grayscale could make this move and deal with any consequences later. However, Johnsson expressed doubts about NYSE’s support without an effective registration statement for the ETF.
Geraci argued that the SEC has exceeded its time frame and implied that the ETF has been “deemed approved.” He emphasized the potential benefits for NYSE in supporting Grayscale’s move. Johnsson conceded some points but remained skeptical, believing that the SEC still has enough power to oppose such a move.
Geraci highlighted the credibility and new business opportunities NYSE could gain by supporting Grayscale. Ultimately, the decision would come down to a cost/benefit analysis. Geraci believed that the analysis would be more compelling than some might think.
The SEC vs. Grayscale Saga
In a separate thread on X, Johnsson discussed the ongoing battle between the SEC and Grayscale regarding the conversion of GBTC into a spot Bitcoin ETF. He speculated that SEC chair Gensler is staying quiet on this matter because there may be a behind-the-scenes battle over whether Grayscale needs to resubmit its application after a ruling.
Johnsson explained that while the DC Circuit ruled the SEC’s disapproval order unlawful, it raised questions about GBTC’s status. The key issue lies in statutory interpretation, with Grayscale arguing that if the order is voided, GBTC’s conversion is “deemed approved.” However, Johnsson noted that this argument is not guaranteed to succeed and may require litigation.
Grayscale is likely leveraging this position in negotiations with the SEC. However, Johnsson believes that it would be faster for Grayscale to simply refile its application.
Hot Take: Potential Implications of Grayscale’s Move
If Grayscale were to successfully uplist its spot Bitcoin ETF to NYSE, it could strengthen NYSE’s position and reputation in the industry. By supporting such a move, NYSE could gain credibility and attract new business from ETF issuers. While there are risks involved, the potential rewards for NYSE could be significant. Ultimately, the decision would require careful consideration of the cost and benefits. It remains to be seen whether Grayscale will take this audacious step and how the SEC will respond.
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