- Grayscale plans to convert its GBTC fund into a spot Bitcoin ETF a person with knowledge of the matter reveals.
- Experts believe that this is unlikely given the indication that the SEC might only be interested in CME-Traded Bitcoin futures.
Grayscale Investments is looking to convert its Bitcoin fund into a spot ETF. According to a CNBC report, ‘a person with knowledge of the matter’ revealed that the firm is planning on applying to U.S Securities and Exchange Commission (SEC) to turn its Bitcoin fund, the largest in the world, into a spot Exchange-Traded Fund (ETF).
This comes after an announcement from ProShares that its Bitcoin futures ETF will begin trading this week. The ETF was approved for listing by the NYSE Arca on Friday. The ProShares Bitcoin Strategy ETF is set to be the first-ever Bitcoin linked ETF to trade in the U.S. the fund will be trading under the ticker ‘BITO’ and will give investors access to futures contracts but not the spot market. Some in the crypto community are not impressed by this move, as the fund would not be linked to Bitcoin but derivative contracts traded on the Chicago Mercantile Exchange instead.
According to the source, Grayscale is preparing to apply for SEC approval to turn its Bitcoin fund into a spot BTC ETF. The application would be subject to a 75-day review period after which the SEC has the option of either approving, rejecting or delaying the application.
Experts raise concern over Bitcoin ETF
Grayscale has been intending to seek approval for a BTC ETF for a while now. They first filed for an ETF in January 2017 but went on to withdraw the application in October after the SEC revealed that they were still uneasy with the Bitcoin industry. Earlier this year, the firm revealed that it would apply for regulatory approval for a BTC ETF once the environment was more Bitcoin-friendly.
Some experts however are of the view that Grayscale’s goal of having a spot ETF approved is far-fetched given SEC Chair Gary Gensler’s speech at the Aspen Security Forum where stated that he looked forward to seeing the SEC staff reviewing ETF fillings, particularly those for CME-Traded Bitcoin futures.
In a blog post published in August, Dave Nadig Director Research at ETFTrends.com wrote:
Greyscale’s bid to convert their highly successful Grayscale Bitcoin Trust (GBTC) is probably just as much on hold. I keep reading hot takes that, because GBTC is already available, such a conversion would be simple and fast to enact. Nothing could be further from the truth. Converting funds from structure to structure is hard, requiring significant operational and legal work–work none of the ETF filers above would have to do. I actually think that puts GBTC at the back of the line, not the front.
