Grayscale executives met with the Securities and Exchange Commission (SEC). These were not just standard talks, but a serious discussion about the transformation of the Grayscale Bitcoin Trust into a spot Bitcoin ETF. The detailed negotiations, which included Grayscale CEO Michael Sonnenshein and Chief Legal Officer Craig Salm, could be a watershed moment for the industry.
BNY Mellon an asset in the hands of Grayscale
In a report published on November 20 by the SEC, a discussion of NYSE Arca’s proposal to change the listing and trading rules for Grayscale Bitcoin Trust shares under NYSE Arca Rule 8.201-E is described. This is a milestone on the way to creating a spot Bitcoin ETF, which is currently one of the main topics in the cryptocurrency world.
Documents revealed by Bloomberg ETF analyst James Seyffart highlight the essence of the agreement Grayscale signed with BNY Mellon. The document deals with the transfer agency and services. In doing so, it is crucial in the process of Grayscale Bitcoin Trust’s evolution into an ETF. It is intended that BNY Mellon will act as GBTC’s agent, facilitating the issuance, share repurchase and handling of shareholder accounts.
GBTC could easily become a Bitcoin ETF fund
Seyffart also points to the role of the SEC’s Division of Trading and Markets in the context of approving or rejecting Forms 19b-4. These documents are key to informing the SEC of proposed regulatory changes by self-regulatory organizations. While the BNY Mellon deal seems a natural step in the process, it does not mean an automatic conversion of GBTC into an ETF.
Nate Geraci, an expert on ETFs, focused attention on the terminology used in the meeting. In his view, the term “conversion” as “uplisting” suggests that GBTC conversion will not be a problem in the ETF process. Geraci also noted Grayscale’s potential strength in the Bitcoin ETF market, especially in the context of competition as measured by the value of assets under management.
Bitcoin could kick off the new year with a big event
Grayscale’s recent actions, such as filing a registration application with the SEC, indicate a consistent effort to list GBTC shares on the NYSE Arca. Similar efforts, albeit with slightly different characteristics, are guiding institutions such as BlackRock and Fidelity, which are also vying for approval for spot Bitcoin ETFs.
Seyffart expresses hope for approval of a Bitcoin ETF fund before January 10, 2024, putting the probability of this happening at around 90%. Despite the dynamic nature of such processes, the trends observed appear to be favorable for the future of these funds.
