Grayscale Submits Updated Prospectus for Bitcoin ETF Approval
Digital asset manager Grayscale has submitted an updated prospectus to the Securities and Exchange Commission (SEC) in its bid to convert its Grayscale Bitcoin Trust into a spot bitcoin exchange-traded fund (ETF). The submission follows a meeting between Grayscale and the SEC to discuss the proposed product.
Grayscale Persists in Pursuit of Bitcoin ETF Approval
The updated filing is an amended Form S-3 registration statement, which companies use when they have already fulfilled SEC reporting obligations. According to ETF analyst James Seyffart at Bloomberg, the prospectus does not seem to have significant changes from the original filing.
One notable update in the filing is a suggested ticker symbol change to “BTC” instead of the current “GBTC.” However, Grayscale clarified that it has no plans to use the BTC ticker for this particular case, as it has a separate filing for a Global Composite Bitcoin ETF registered with the BTC ticker.
The filing confirms that Grayscale is continuing discussions with the SEC and making updates based on feedback. Specific changes include shortening a line about cash creation orders and removing some risk disclosure pages.
In a meeting between Grayscale executives, lawyers from Davis Polk, and members of the SEC’s Division of Trading and Markets, they discussed the proposed listing on NYSE Arca. Grayscale CEO Michael Sonnenshein was also present.
Awaiting SEC Ruling on Bitcoin ETF
Grayscale aims to convert an existing Bitcoin investment product into an ETF, setting it apart from other spot Bitcoin ETF applications. While the SEC is not obligated to approve the prospectus, ongoing talks between regulators and Grayscale are seen as positive signs for Bitcoin ETF prospects in general.
In August, Grayscale won a court ruling that required the SEC to reconsider its initial rejection of the conversion application. This added pressure on the agency to take another look at the proposal.
ETF Store President Nate Geraci commented that Grayscale’s reference to the GBTC conversion as an “uplisting” demonstrates their confidence in securing approval. If converted on the same day other issuers launch spot Bitcoin ETFs, Grayscale could dominate the market with its $50 billion in assets under management.
Increasing Likelihood of Bitcoin ETF Approval
Bloomberg analysts have recently increased the probability of a spot Bitcoin ETF being approved by January 2023 to 90%. With Grayscale actively seeking regulator feedback and amending its proposal, it appears more likely that this long-awaited product will become a reality.
Although the SEC has yet to approve a spot Bitcoin ETF in the U.S., Grayscale’s persistence and existing scale may prove decisive in overcoming this barrier. As cryptocurrencies become more entrenched in mainstream finance, regulators seem to be running out of reasons to deny investors access to a spot Bitcoin ETF.
Hot Take: Grayscale Continues Push for Bitcoin ETF
Grayscale’s submission of an updated prospectus for a Bitcoin ETF demonstrates their determination to secure regulatory approval. The amended filing includes changes based on feedback from discussions with the SEC. While the SEC has rejected all previous applications for a spot Bitcoin ETF, ongoing talks between regulators and Grayscale indicate a positive outlook for future approvals. With Bloomberg analysts increasing the probability of approval and Grayscale’s existing scale and assets under management, they could dominate the market if their conversion is approved on the same day as other issuers’ spot Bitcoin ETFs launch. As cryptocurrencies gain acceptance in mainstream finance, it becomes harder for regulators to justify denying investors access to this investment opportunity.
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