Cryptocurrency asset manager Grayscale is progressing in its efforts to transform its widely used Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF). Following a meeting with the Securities and Exchange Commission (SEC), the company has submitted a new preliminary prospectus.
related: Grayscale Meets SEC on Bitcoin Trust’s ETF Conversion
On November 22, Grayscale filed the updated prospectus outlining its intentions to convert the GBTC fund into a spot ETF. A notable change highlighted by Bloomberg Intelligence ETF expert James Seyffart is the plan to alter GBTC’s ticker to BTC. However, Seyffart clarified that this adjustment doesn’t indicate a filing for listing as BTC.
While Grayscale has a filing for the Global Composite Bitcoin ETF registered with the BTC ticker, its launch remains uncertain pending approval of the GBTC conversion.
Responding to inquiries about the surge in spot ETF applications, Seyffart noted that the prospectus update confirms ongoing discussions between Grayscale and the SEC, with modifications made based on feedback from the regulatory body.
Grayscale has streamlined the filing by making amendments to risk factors and disclosures. Notably, the company’s executives and legal representatives engaged in discussions with the SEC earlier in the week regarding the product.
The SEC memorandum disclosed that talks revolved around “NYSE Arca, Inc.’s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust under NYSE Arca Rule 8.201-E.”
Grayscale disclosed a transfer agency and service agreement with BNY Mellon, the oldest bank in the United States, which will serve as the transfer agent for GBTC. BNY Mellon’s responsibilities include facilitating share issuance and redemption, managing communications, and maintaining shareholder accounts.
Nate Geraci, President of ETF Store, emphasized that a significant aspect of Grayscale’s SEC meeting is the reference to the GBTC “conversion” as an “uplisting.” If Grayscale successfully uplists GBTC to NYSE Arca on the same day as other issuers launch spot BTC ETFs and compete effectively on fees, it could potentially dominate the ETF category, even with BlackRock in the competition.
Grayscale’s existing assets under management for the product exceed $20 billion, providing it with a substantial advantage over competitors who are starting from scratch. Bloomberg analysts have increased the likelihood of Bitcoin spot ETF approval to 90% by January, but the SEC’s propensity for delay continues to influence the timeline.
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