Grayscale Investments is preparing to file an application to convert the world’s largest bitcoin fund into a spot bitcoin ETF in the coming week, according to sources.
Grayscale had already planned to file an application with the Securities and Exchange Commission (SEC) once the agency approved competitors for a futures-based bitcoin ETF. That was approved by the agency late on Friday.
Bitcoin’s Acceptance as an Asset Class
The application, according to the source, will begin a 75-day review period and, if approved, will be a significant step toward legitimizing Bitcoin as an asset class. Bitcoin has recently approached all-time highs as the price surpassed $60,000, demonstrating resilience in the face of several setbacks such as China’s ban on bitcoin and other cryptocurrencies.
Crypto investors are still dissatisfied.
While the debut of the Bitcoin futures ETF is regarded as a significant milestone, some crypto investors remain unsatisfied and regard it as an inadequate step because the ETF would be linked to derivative contracts traded on the Chicago Mercantile Exchange rather than actual Bitcoin. Grayscale’s spot bitcoin ETF application, on the other hand, represents an investment backed by Bitcoins rather than the derivatives linked to it.
Putting the SEC on the Spot
Grayscale Investments currently controls a sizable portion of the world’s bitcoin through its GBTC trust. As of last week, GBTC was in charge of $38,7 billion in assets. The company has become a pioneer in cryptocurrency investing, having first filed for an ETF in January 2017.
However, it withdrew the application after the Securities and Exchange Commission indicated that it was not completely comfortable with the Bitcoin market. According to the source, Grayscale’s current application is seen as an attempt to force the SEC’s hand, with the underlying message that if they are comfortable with bitcoin futures, the regulators should be comfortable with the underlying market.
The SEC could still choose to delay or reject Grayscale’s application based on the options available to it. Michael Sonnenshein, CEO of Grayscale, has also publicly criticized the SEC’s preference for futures-based ETFs, calling it shortsighted and harmful to investors.