Grayscale starts the clock on SEC decision to convert GBTC to an ETF


NYSE Arca has filed to list Grayscale's proposed bitcoin exchange-traded fund, starting the clock on a decision from the Securities and Exchange Commission (SEC).

Grayscale was said to be ramping up its efforts to convert its flagship fund, the Grayscale Bitcoin Trust (GBTC), into an ETF this July. It announced it would offload fund account and administration functions to BNY Mellon in October. At the time, CEO Michael Sonnenshein said engaging BNY Mellon was an important milestone for converting the trust.

In February, Sonnenshein told The Block during a podcast recording the firm planned to " register and uplift GBTC onto a national securities exchange as a bonafide ETF."

To that end, it has also hired David LaValle as global head of ETFs, the previous CEO of index provider at Alerian and once head of ETF capital markets at State Street. 

Grayscale has said that ETF status is the end game for its products. Earlier steps in the life cycle also include registering the funds as SEC-reporting companies, which both its bitcoin and ether funds have achieved.

Despite the SEC's allowance of a futures-based ETF, the Commission has yet to let a spot ETF through. In previous rejections, the Commission has cited concerns of market manipulation in spot venues. The recently allowed futures ETF holds futures traded on CME, a federally-regulated exchange, which some say makes the difference.

Still, Grayscale argues that if a regulator is comfortable with a derivative, it must be comfortable with the underlying asset. 

“At Grayscale, we believe that if regulators are comfortable with ETFs that hold futures of a given asset, they should also be comfortable with ETFs that offer exposure to the spot price of that same asset,” said Dave LaValle, Global Head of ETFs at Grayscale Investments, in a statement.

The SEC most recently punted the decision on four applications to the end of 2021. For all applicants, it was not the first extension received. VanEck is the furthest along in the life cycle and can expect an answer by November 14. 

ProShares' bitcoin futures-based ETF began trading on the NYSE Tuesday. 

For more breaking stories like this, make sure to follow The Block on Twitter.

Trending Stories

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Will Sanctions Drive Russia into the Arms of Cryptocurrencies?

From the removal of many Russian banks from SWIFT to a seemingly constant flow of new sanctions, Russia’s invasion of Ukraine has left many to wonder: Is the country likely to lurch towards cryptocurrencies? And if so, what does this mean for businesses that are holding and/or using crypto? Crypto and sanctions evasion Although crypto […]
Read Full Story
Sponsored Post

Layer-2 Scaling Solutions: A Framework for Comparison - Commissioned by Polygon

Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
Read Full Story
May 5, 2022, 3:17PM UTC