Grayscale
has submitted an updated filing for its forthcoming spot Bitcoin
Exchange-Traded Fund (ETF) to the U.S. Securities and Exchange Commission (SEC)
on November 22. The filing is an amendment, a type often utilized by firms that
have met reporting requirements.
Grayscale’s
ETF proposal involves converting an existing investment vehicle. Recent
discussions between Grayscale, the SEC, and NYSE Arca indicate ongoing dialogue
about the ETF’s potential listing. Grayscale’s approach has sparked optimism
for ETF approval.
Earlier,
a
three-judge panel of the District of Columbia Court of Appeals ruled that
the SEC erred in rejecting Grayscale’s proposed Bitcoin ETF without a clear
explanation. Following this ruling, Grayscale urged the SEC to review and
approve its ETF application.
In
a letter, Grayscale’s law firm, DavisPolk, emphasized the optimal use of
resources and suggested the SEC issue an approving order for the product.
Grayscale contends that the market surveillance used for approved Bitcoin
futures ETFs is sufficient for its spot ETF, as both rely on bitcoin’s
underlying price.
The
appeals court supported Grayscale’s
argument, deeming the SEC’s denial arbitrary for not clarifying material
differences between the two arrangements. Despite Grayscale’s court victory
requiring the SEC to review its application, approval is not guaranteed.
Bloomberg
ETF analyst James Seyffart noted that while the filing doesn’t appear to
introduce significant changes, it underscores ongoing discussions between
Grayscale and the SEC, leading to updates in response to feedback. Although
some details, like a line related to cash orders, were modified, Seyffart
clarified that the fund’s ticker remains GBTC, contrary to initial speculation.
Update: New
Grayscale S-3/Prospectus #Bitcoin
ETF filing to convert $GBTC.
Right off the bat the biggest update is the plan to change $GBTC‘s
ticker to $BTC
(which was expected). Skimming through the rest now. pic.twitter.com/W9uNdAHLMv—
James Seyffart (@JSeyff) November
22, 2023
Regulatory
Challenges: Grayscale’s Spot Bitcoin ETF Journey
In
a previous report, Finance Magnates
highlighted the status of Grayscale Spot Bitcoin ETF. It noted that Grayscale’s
potential launch of the Spot Bitcoin ETF has generated
significant interest within the financial industry, following the success of
its Grayscale Bitcoin Trust (GBTC).
While
GBTC allows exposure to Bitcoin, there is a growing demand for a Spot Bitcoin
ETF that directly tracks the cryptocurrency’s price. Despite the dominance of
Grayscale in introducing digital assets to mainstream finance, the current
structure of GBTC lacks the transparency and liquidity of a typical ETF,
prompting the appeal for a Spot Bitcoin ETF.
Investors
seek a more direct and cost-effective option, eliminating the premium or
discount to Net Asset Value that GBTC can experience. However, regulatory
obstacles, particularly from the SEC,
pose challenges. The SEC’s concerns regarding market manipulation, fraud, and
investor protection have historically led to the rejection of various Bitcoin
ETF proposals.
While
there are indications of a changing stance within the SEC under Chairman Gary
Gensler’s leadership, the road to approval involves market maturity, ongoing
regulatory discussions, effective market surveillance, investor education, and
ultimately regulatory approval. These steps aim to enhance market integrity and
address concerns, potentially increasing the SEC’s confidence in approving a
Spot Bitcoin ETF.
Grayscale
has submitted an updated filing for its forthcoming spot Bitcoin
Exchange-Traded Fund (ETF) to the U.S. Securities and Exchange Commission (SEC)
on November 22. The filing is an amendment, a type often utilized by firms that
have met reporting requirements.
Grayscale’s
ETF proposal involves converting an existing investment vehicle. Recent
discussions between Grayscale, the SEC, and NYSE Arca indicate ongoing dialogue
about the ETF’s potential listing. Grayscale’s approach has sparked optimism
for ETF approval.
Earlier,
a
three-judge panel of the District of Columbia Court of Appeals ruled that
the SEC erred in rejecting Grayscale’s proposed Bitcoin ETF without a clear
explanation. Following this ruling, Grayscale urged the SEC to review and
approve its ETF application.
In
a letter, Grayscale’s law firm, DavisPolk, emphasized the optimal use of
resources and suggested the SEC issue an approving order for the product.
Grayscale contends that the market surveillance used for approved Bitcoin
futures ETFs is sufficient for its spot ETF, as both rely on bitcoin’s
underlying price.
The
appeals court supported Grayscale’s
argument, deeming the SEC’s denial arbitrary for not clarifying material
differences between the two arrangements. Despite Grayscale’s court victory
requiring the SEC to review its application, approval is not guaranteed.
Bloomberg
ETF analyst James Seyffart noted that while the filing doesn’t appear to
introduce significant changes, it underscores ongoing discussions between
Grayscale and the SEC, leading to updates in response to feedback. Although
some details, like a line related to cash orders, were modified, Seyffart
clarified that the fund’s ticker remains GBTC, contrary to initial speculation.
Update: New
Grayscale S-3/Prospectus #Bitcoin
ETF filing to convert $GBTC.
Right off the bat the biggest update is the plan to change $GBTC‘s
ticker to $BTC
(which was expected). Skimming through the rest now. pic.twitter.com/W9uNdAHLMv—
James Seyffart (@JSeyff) November
22, 2023
Regulatory
Challenges: Grayscale’s Spot Bitcoin ETF Journey
In
a previous report, Finance Magnates
highlighted the status of Grayscale Spot Bitcoin ETF. It noted that Grayscale’s
potential launch of the Spot Bitcoin ETF has generated
significant interest within the financial industry, following the success of
its Grayscale Bitcoin Trust (GBTC).
While
GBTC allows exposure to Bitcoin, there is a growing demand for a Spot Bitcoin
ETF that directly tracks the cryptocurrency’s price. Despite the dominance of
Grayscale in introducing digital assets to mainstream finance, the current
structure of GBTC lacks the transparency and liquidity of a typical ETF,
prompting the appeal for a Spot Bitcoin ETF.
Investors
seek a more direct and cost-effective option, eliminating the premium or
discount to Net Asset Value that GBTC can experience. However, regulatory
obstacles, particularly from the SEC,
pose challenges. The SEC’s concerns regarding market manipulation, fraud, and
investor protection have historically led to the rejection of various Bitcoin
ETF proposals.
While
there are indications of a changing stance within the SEC under Chairman Gary
Gensler’s leadership, the road to approval involves market maturity, ongoing
regulatory discussions, effective market surveillance, investor education, and
ultimately regulatory approval. These steps aim to enhance market integrity and
address concerns, potentially increasing the SEC’s confidence in approving a
Spot Bitcoin ETF.