SEC and Grayscale in Talks Over Bitcoin ETF
The United States Securities and Exchange Commission (SEC) has been engaging in discussions with Grayscale Investments to determine whether to convert Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF (exchange-traded fund). This development comes after Grayscale’s recent legal victory over the SEC, and it could have a significant impact on the crypto market, potentially making it easier for everyday investors to get involved with Bitcoin.
Grayscale’s ongoing dialogue with the SEC’s Division of Trading and Markets and the Division of Corporation Finance is in response to a US federal court ruling that overturned the SEC’s initial rejection of Grayscale’s ETF application. This ruling has reignited the possibility of a spot Bitcoin ETF and placed Grayscale’s application back under SEC scrutiny.
Craig Salm, Grayscale’s Chief Legal Officer, has expressed optimism about the company’s renewed focus on engaging with the Division of Trading and Markets despite ongoing challenges. He pointed out that other financial giants like BlackRock and Fidelity have also made progress in their Bitcoin ETF applications.
“Right now we’re just laser-focused on constructively reengaging with Trading and Markets… There are still things that have to be worked through… Overall, it’s been good engagement, and it’s a matter of when, not a matter of if anymore,” Salm stated.
The SEC has not publicly commented on the new talks but faces heightened expectations and scrutiny. SEC Chair Gary Gensler refrained from commenting on Grayscale’s application but highlighted the work of the agency’s corporation-finance arm in dealing with evolving technology and business models. This division will play a central role in evaluating Grayscale’s application.
“I’m not going to prejudge the staff’s work on those multiple ETFs filings, but it’s also about those companies. When a company, or an asset manager, is seeking to take something public, these exchange-traded products need to be registered with the SEC and they go through a filing somewhat similar to going public like an IPO,” Gensler said.
Bloomberg analysts suggest that even if approvals are not forthcoming this month, there is a 90% probability of Bitcoin ETF approval by January 10, 2024. JPMorgan noted that the SEC could face lawsuits if it fails to approve applications for Spot Bitcoin ETFs.
Hot Take: What’s Next for Bitcoin?
The possibility of converting Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF has sparked excitement in the crypto market. If approved by the SEC, this move could open up significant opportunities for everyday investors looking to engage with Bitcoin. The potential approval window for all pending Spot Bitcoin ETFs is set to open, offering hope for increased accessibility to cryptocurrency investments.
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