On Wednesday, Grayscale, the digital asset manager, presented a revised prospectus to the Securities and Exchange Commission (SEC) regarding the transformation of its Grayscale Bitcoin Trust into a spot bitcoin exchange-traded fund (ETF). This action comes in the wake of a meeting held between Grayscale and the SEC to deliberate on the proposed product.
Grayscale Adamant About Getting Bitcoin ETF Approved
The revised submission takes the form of an amended Form S-3 registration statement, a choice often made by companies that have fulfilled their SEC reporting obligations. According to ETF analyst James Seyffart at Bloomberg, the prospectus seems to lack significant alterations from the initial filing.
A notable modification suggested in the update is a proposed change in the ticker symbol from the current “GBTC” to “BTC.” However, Seyffart clarified later that Grayscale does not intend to adopt the “BTC” ticker for this particular case. The company has a separate filing for the Global Composite Bitcoin ETF, registered with the “BTC” ticker.
Seyffart, through a tweet, conveyed that the filing affirms Grayscale’s ongoing discussions with the SEC and its commitment to incorporating feedback. Specific adjustments include the abbreviation of a line concerning cash creation orders and the removal of certain risk disclosure pages.
In a memorandum dated November 20, it was disclosed that members of the SEC’s Division of Trading and Markets engaged in discussions with Grayscale executives and legal representatives from Davis Polk regarding the proposed listing on NYSE Arca. Grayscale CEO Michael Sonnenshein was also in attendance during this meeting.
Waiting Game for SEC Ruling Continues
Grayscale aims to transform an existing Bitcoin investment product into an ETF, a departure from the approach of other spot Bitcoin ETF applications. Although SEC approval of the prospectus is not mandatory, ongoing discussions between regulators and Grayscale are viewed positively by analysts, suggesting potential optimism for Bitcoin ETF prospects as a whole.
In August, Grayscale secured a court ruling mandating the SEC to reevaluate its initial rejection of the conversion application, compelling the agency to reconsider the proposal.
Nate Geraci, President of ETF Store, noted that describing the GBTC conversion as an “uplisting” reflects Grayscale’s confidence in obtaining approval. If the conversion aligns with the launch of spot bitcoin ETFs by other issuers, Grayscale could dominate the space, leveraging its substantial $50 billion in assets under management.
Recent analyses by Bloomberg have increased the likelihood of a spot bitcoin ETF being approved by January 2023 to 90%. Grayscale’s proactive engagement with regulators and continuous refinement of its proposal contribute to the growing anticipation that this long-awaited product is on the verge of realization.
While the SEC has yet to approve a spot bitcoin ETF in the U.S., the persistent efforts and considerable scale of Grayscale may prove pivotal in overcoming this hurdle. As cryptocurrencies become firmly integrated into mainstream finance, regulators appear to be running out of justifications to deny investors access to a spot Bitcoin ETF.