Grayscale executives and legal representatives recently engaged in discussions with the Securities and Exchange Commission (SEC) regarding a proposed rule modification to enable the listing of the Grayscale Bitcoin Trust (GBTC) as a spot Bitcoin exchange-traded fund (ETF).
Additionally, as per a memo released by the SEC on November 20, the meeting involved Grayscale CEO Michael Sonnenshein, legal chief Craig Salm, ETF head Dave LaValle, and four additional executives, accompanied by five representatives from the Davis Polk law firm.
The talks centered around NYSE Arca, Inc.’s suggested rule amendment to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E.
Grayscale disclosed that it had established a Transfer Agency and Service Agreement with BNY Mellon, according to information shared by Bloomberg ETF analyst James Seyffart. BNY Mellon will serve as the agent for Grayscale Bitcoin Trust (GBTC), overseeing the issuance and redemption of shares, as well as maintaining shareholder accounts.
Grayscale’s SEC Meeting Sparks Speculation on GBTC Uplisting in Spot Bitcoin ETF Arena
In a Twitter post on November 21, Seyffart noted that the trading and markets division is responsible for evaluating and deciding on 19b-4s, a form used to notify the SEC of a proposed rule change by a self-regulatory organization.
Seyffart clarified that the agreement between Grayscale and BNY Mellon is likely a necessary step and does not necessarily indicate an imminent conversion of GBTC.
On November 22, ETF Store President Nate Geraci highlighted a significant aspect of Grayscale’s SEC meeting, emphasizing that the term “uplisting” is being used to describe the potential conversion of GBTC. According to Geraci, this terminology does not imply any issues with the conversion to an ETF.
Grayscale, if successful in uplisting GBTC to NYSE Arca simultaneously with other issuers launching spot Bitcoin ETFs, could establish dominance in this ETF category, especially if they competitively price their offerings, Geraci added.
He projected that Grayscale would enter the market with $20 billion in assets under management on the first day, even with the participation of BlackRock.
Grayscale Advances NYSE Arca Listing for GBTC as SEC Revisits Spot Bitcoin ETF Approvals
In October, Grayscale submitted an S-3 form registration statement to the SEC, expressing its intent to list GBTC shares on NYSE Arca under the ticker symbol GBTC. A U.S. appellate court had earlier mandated the SEC to review its decision denying Grayscale’s request to convert GBTC into a spot ETF.
Grayscale is among several major asset managers, including BlackRock and Fidelity, seeking SEC approval for spot Bitcoin ETFs. Seyffart noted that progress is ongoing, maintaining a 90% likelihood of ETF approval on or before January 10, 2024.