According to sources, Grayscale investments is moving forward with filing an application to convert the world’s largest bitcoin fund into a spot bitcoin ETF during the coming week.
Grayscale had already put in place plans to file its application with the Securities and Exchange Commission (SEC) once the agency gave the green light to allowing competitors for a futures-based bitcoin ETF. The approval from the agency for that came late on Friday.
Legitimizing Bitcoin As An Asset Class
According to the source, the application will begin a 75-day review period and, once approved, would mark a significant step in legitimizing Bitcoin as an asset class. Bitcoin has approached its all-time highs in recent days as the price went over $60,000, proving to be resilient in the face of several setbacks such as the Chinese ban on bitcoin and other cryptocurrencies.
Crypto Investors Still Not Satisfied
While the Bitcoin futures ETF’s debut is considered a significant milestone, some crypto investors are still not satisfied and consider it an inadequate step as the ETF would be linked to derivative contracts that are traded on the Chicago Mercantile Exchange rather than actual Bitcoin. However, Grayscale’s spot bitcoin ETF application is representative of an investment backed by Bitcoins and not the derivatives tied to it.
Forcing The SEC’s Hand
Grayscale Investments currently holds a significant chunk of the world’s bitcoin for its GBTC trust. As of last week, GBTC holds $38,7 billion in assets under its management. The company has become a pioneer in investing in crypto and had initially filed for an ETF back in January 2017.
However, it withdrew the application after signals from the Securities and Exchange Commission that it wasn’t 100% comfortable with the Bitcoin market. According to the source, Grayscale’s current application is being viewed as an attempt to force the SEC’s hand, with the underlying message that if they are comfortable with bitcoin futures, then the regulators should be comfortable with the underlying market.
For the options that the SEC has at its disposal, it could still choose to delay or completely reject Grayscale’s application. CEO of Grayscale, Michael Sonnenshein, has also been publicly critical about the SEC’s preference for futures-based ETFs, calling the preference shortsighted and detrimental to investors.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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