The US Securities Exchange and Commission (SEC) is soon to deliver its verdict on the conversion of Grayscale’s Bitcoin trust into a Spot ETF. The pioneer of institutional crypto investments says it expects all eventualities, but has already embarked on the path to possible licensing by “recruiting” high-profile financial partners to support this change.
Verdict expected on July 6 for Grayscale’s BTC Spot ETF
The SEC will do everything possible to delay its decision, but having exhausted the legal deadlines to render its verdict, it will have to reveal on July 6 whether or not it authorizes its first spot BTC ETF.
If the context does not seem conducive to softening the inflexible position of a regulatory authority camped on the certainty that only a BTC traded according to the famous futures contracts of the Chicago Commodity Exchange (CME) is likely to offer a financial instrument able to protect investors, Grayscale continues to believe in its lucky star.
It must be said that the powerful asset manager will have mobilized all the means at its disposal to achieve this. And first, relying on the customers of its products that it encouraged to protest to the SEC, which welcomed comments, their desire to finally see a Grayscale stamped spot ETF. In a letter to investors dated Monday, the giant says that 99.96% of comments agree.
A legal battle with the SEC
Similarly, an armada of lawyers follows the file as closely as possible. And they found enough to argue against the intransigence of the SEC by relying on the last authorizations it issued under law 34 and no longer law 40 which was blocking.
SEC actions over the past eight months […] reported increased recognition and comfort with the maturity of the underlying Bitcoin market. The endorsement of every bitcoin-related investment product reinforces our case for why the US market deserves a bitcoin spot ETF.
Michael Sonnenshein, CEO of Grayscale, in Letter to Investors
An operational anticipation
Finally, in the home straight, Grayscale has just announced an agreement with Wall Street companies Vitu and Jane Street. If approved, both trading firms and liquidity providers would become authorized participants of the Bitcoin ETF.
This announcement by Virtu and Jane Street is confirmation that the market has reached such maturity that institutional players are ready to support this type of ETF.
Michael Sonnenshein, CEO of Grayscale, in Bloomberg
Although he can be reassured by the guarantees offered by Grayscale, particularly on the operational aspect and the question of liquidity – the Grayscale Bitcoin Trust (GBTC) containing more than 650,000 “physical” BTC – he is not certain SEC boss Gary Gensler to change course. It will also be interesting to observe his arguments closely, admitting that he develops them, something to which he is in no way forced.
According to Eric BalchunasBloomberg analyst and ETF expert, “the odds of GBTC being cleared to convert to an ETF next week are 0.5%.” If so, that would be bad news for Grayscale. Its BTC trust has a market cap of around $13.6 billion today, down 3x from November, and its share is trading at a minus 32% discount to the price of BTC.. Nevertheless, and despite public ranting, Michael Sonnensheim knows that the likelihood of conversion is low. Also, he has undoubtedly prepared a disillusioned tomorrow, even considering, as he had already announced, legal proceedings against the SEC for discrimination.