Grayscale Meets with the SEC for Bitcoin ETF Approval
Grayscale Investments is still working on obtaining approval for its Grayscale Bitcoin Trust to become a spot bitcoin exchange-traded fund. The asset manager met with the SEC’s division of trading and markets to discuss the potential listing of the product’s shares under NYSE Arca Rule 8.201-E. According to a memo by the SEC, this is related to the proposed rule change by NYSE Arca to list and trade shares of the Grayscale Bitcoin Trust.
Last month, Grayscale filed a new registration statement with the SEC to convert its trust product into a spot bitcoin ETF, and it also received a formal mandate from a D.C. circuit court, directing the regulator to re-review its application. Additionally, Grayscale and the Bank of New York Mellon agreed for BNY Mellon to serve as the transfer agent for trust shares.
The shares are intended to be listed on NYSE Arca under the symbol GBTC, and issued on an ongoing basis upon approval of its S-3 form and a separate 19b-4 filing by NYSE Arca. Other asset managers like BlackRock and Fidelity are also pursuing approval for spot bitcoin ETFs, with the SEC “doing work” on these filings, according to SEC Chair Gary Gensler. There have been rumors that other potential spot bitcoin ETF issuers have also been meeting with the SEC in the last week.
BlackRock and Nasdaq employees also met with the SEC, discussing the proposal to list and trade shares of the iShares Bitcoin Trust. The SEC also received detailed presentations on “In-Kind” and “In-Cash” redemption models. It has been suggested that BlackRock prefers in-kind redemption for its bitcoin ETF, as it would be the cleanest structure for them and end investors.
Hot Take
Despite the challenges and meetings with the SEC, Grayscale Investment’s efforts to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF are moving forward. The interest from BlackRock and Fidelity, as well as their discussions with the SEC, indicate a growing demand and potential for spot bitcoin ETFs. It’s clear that asset managers and regulatory authorities are actively pursuing the development of cryptocurrency-based investment products.
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