2023-11-22 21:00 |
In a recent development, the asset manager Grayscale recently met with the Securities and Exchange Commission (SEC) in a move that could suggest that the approval of a Spot Bitcoin ETF is on the horizon.
Why Grayscale’s Meeting With SEC Is SignificantIn a post on his X (formerly Twitter) platform, Bloomberg analyst James Seyffart made this development known and specifically stated that the meeting was with the SEC’s division of trading and markets, which took place on November 20. This development is significant as this division of the SEC is in charge of approving or denying proposed rule changes (in this case, as it relates to Grayscale’s Bitcoin Trust).
Many had continued to speculate on the next steps following the SEC’s decision not to appeal the US Court of Appeals’ ruling in favor of Grayscale. However, the court had ordered that the SEC review Grayscale’s application again.
The asset manager is looking to convert its Grayscale Bitcoin Trust (GBTC) to a Spot Bitcoin ETF, which will be listed on the NYSE Arca. As such, the meeting with the SEC could be seen as a positive sign that the SEC may be more open to approving Grayscale’s application this time around.
Meanwhile, Grayscale is also putting plans in motion in the event that the fund is approved by the SEC. The asset manager recently entered into a transfer agency and service agreement with BNY Mellon, which Seyffart also highlighted in his post. As part of the agreement, the bank will be responsible for facilitating the issuance and redemption of shares of the trust.
However, as Seyffart noted, the agreement didn’t mention anything as to when the fund will become operative as it only stated that the agreement will become effective on the date that shares of the trust begin trading on the NYSE Arca (simply put, when the SEC approves the proposed rule change).
More Positives As To A Spot Bitcoin ETF ApprovalIn his post, Seyffart also stated that he had heard rumors of other potential Spot Bitcoin issuers meeting with the Commission recently. Such development, if true, is a positive sign that the SEC might be more open to the idea of approving these funds as far as they can give the highest assurances of compliance, which could eliminate the concerns the Commission has regarding such investment vehicles.
However, despite the positives, Seyffart and his colleague Eric Balchunas are choosing to take a conservative stance, as the former mentioned that the events of the last few days hadn’t changed the odds they placed on the likelihood of Spot Bitcoin ETF approval. The Bloomberg analysts maintain that there is a 90% chance that any of these funds get approved by January 10, 2024.
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