KEY POINTS

  • Grayscale's application will be reviewed by the SEC within 75 days
  • Grayscale ETF won't be based on derivates, but on the actual currency
  • The firm is looking to get 14 more ETFs to get approved soon

Grayscale, the firm behind the Grayscale Bitcoin Trust (GBTC), has filed with the United States Securities and Exchange Commission (SEC) to change its trust into a bitcoin exchange-traded fund (ETF). 

While Grayscale awaits SEC approval for the conversion of its flagship product, the ProShares Bitcoin futures ETF (BITO) that debuted Tuesday has brought new reasons of hope to many firms. With a recording-breaking performance on the New York Stock Exchange (NYSE), the ETF seems to be a lucrative deal for investors.

Grayscale announced that the NYSE Arca has filed for the conversion through Form 19b-4 with the SEC in a press release. Although the date for approval is not known, Dave LaValle, Global Head of ETFs at Grayscale Investments, stated: “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.”

Grayscale to convert 14 investment products into ETFs 

Grayscale Investments is planning to convert nearly 14 of its investment products into ETFs, including the GBTC ETF. 

As the biggest digital currency investment firm, Grayscale currently holds around 3.44% of all bitcoins in circulation. The difference between the Grayscale ETF and BITO ETF would be that the former will actually be backed by cryptocurrencies and won’t be governed by smart contracts like futures.

According to SEC Chair Gary Gensler, if Grayscale fails to win the approval of the United States SEC, it would follow a further fall in the prices of GBTC shares. On the other hand, if Grayscale is able to get the approval for the conversion, there will be further domination and expansion of the firm.

In 75 days, the result for the application by Grayscale will be announced, and this is a very crucial moment for the firm. With speculations regarding the release of the Valkyrie Bitcoin Futures ETF this week and the dominating performance of the BITO ETF, Grayscale needs to pick up the pace if it wants to remain in the race. 

Bitcoin logo Bitcoin is back above $62,000 and homing in on its record high Photo: AFP / Justin TALLIS