Grayscale Meets With SEC Again To Approve Its Spot Bitcoin ETF

By Kevin • May 12, 2022 3:56 pm • Comments

Grayscale a digital asset manager that currently runs the world’s largest Bitcoin fund and has reported that it has recently had a meeting again with the SEC.

The purpose of the meeting was to discuss and persuade the committee to approve the conversion of its Bitcoin fund to a spot ETF.

The claim here is that the availability of a spot ETF would better protect investors who want to get involved in crypto and would also unlock a large amount of of value for investors.

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Specifically, Grayscale has claimed that this move would unlock up to $8 billion in value for investors and certainly allows more institutional capital to be allocated to the crypto industry.

As a result, this could be the catalyst that the industry needs in order to have another bull run that was experienced last year in 2021.

CNBC reports:

Led by CEO Michael Sonnenshein, Grayscale has engaged in a high-stakes campaign to pressure the U.S. regulator to approve the first spot-based bitcoin ETF.

The asset manager has watched as competitors including ProShares win approval for futures-based bitcoin exchange-traded funds, showing that the SEC is more comfortable with products based on futures over those based on bitcoin.

A spot-based bitcoin ETF would be a significant milestone in the adoption of digital assets because it would open them up to ordinary investors in a familiar wrapper that trades like a stock.

The goal has eluded the industry for more than five years. Grayscale’s first application for a spot bitcoin ETF was in early 2017.

GTBC primarily can be used as a financial asset that allows large institutions to bet on digital assets like Bitcoin.

Successful conversion to an ETF would setup the foundation for the same to be done for a variety of digital assets in the future.

Therefore, this can be seen as an important milestone that must achieved if the crypto industry wants to continue to soar to new heights.

To help push this through, Grayscale has also flooded the SEC with around 3000 letters of support and has already previously hinted that it would sue the SEC if it denied its application again.

Investors within the industry aren’t quite bullish on this happening yet given the SEC’s history of denying such requests, but the remote possibility of it being approved still exists.

ETFdb.com reports:

Broadly speaking, ETFs don’t trade at significant discounts or premiums to NAV because ETFs, like stocks, are priced throughout the trading day. It remains to be seen if the SEC is taking GBTC’s discount to spot bitcoin under advisement. Grayscale says there are more than 850,000 accounts, including professional investors, holding GBTC.

For its part, Grayscale is making clear its feelings on the matter of GBTC’s status as an aspiring ETF.

“The SEC is discriminating against issuers by approving bitcoin futures ETFs and denying bitcoin spot ETFs,” according to Grayscale.

The issuer contends that a spot bitcoin fund is no more risky than the current futures-based products that dominate the domestic bitcoin ETF market. GBTC controls about 3.4% of global bitcoin supply, according to CNBC.

Regulators are finally waking up now and this will likely be an important talking point that influences how the industry will move forward.

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