The potential approval of a Bitcoin spot ETF by the U.S. Securities and Exchange Commission (SEC) has sparked widespread discussion. Grayscale has ultimately agreed to adopt the SEC’s preferred cash creation/redemption model to convert its Bitcoin Trust Fund (GBTC) into a Bitcoin spot ETF. At the same time, Barry Silbert, the founder of Digital Currency Group, the parent company of Grayscale, has resigned from his position as a director at Grayscale, which market analysts believe could be a move to increase the chances of ETF approval.
Grayscale CEO Steps Down as Grayscale Director
GBTC Discount Narrows to -5.51%
Hashdex Meets with SEC Chairman’s Office Staff
Recently, Bloomberg ETF analyst Eric Balchunas commented that the approval of a Bitcoin spot ETF depends primarily on two key factors: following the SEC’s preferred cash creation/redemption model and confirming underwriter information.
Initially, while other issuers had compromised and adopted the cash model, Grayscale insisted on using a physical model when converting its Bitcoin Trust Fund (GBTC) into a Bitcoin spot ETF. However, today, Bloomberg ETF analyst James Seyffart pointed out that Grayscale, in its revised S-3 filing, indicated that they have ultimately accepted the cash model.
In response, Scott Johnson, General Partner at VB Capital, stated that while the SEC claims this is to protect investors, the cash model could pose greater risks to investors looking to invest in Bitcoin through spot ETFs. He commented:
It is understood that the SEC’s move to prevent brokers from directly dealing with Bitcoin is an attempt to better track the movement of Bitcoin from exchanges and mitigate any potential risks associated with anti-money laundering or KYC compliance.
It is worth mentioning that at the same time, Barry Silbert, the founder and CEO of Digital Currency Group, which is embroiled in legal disputes, announced his resignation as a director at Grayscale, with Mark Shifke, CFO of DCG, taking over.
Market analysts speculate that Silbert’s departure could significantly increase the likelihood of Grayscale successfully converting GBTC into a Bitcoin spot ETF. Ramah Luwalia, CEO of Lumida Wealth, commented that Silbert’s resignation is likely voluntary, given that the SEC is investigating Silbert and DCG, in order to improve the chances of ETF approval.
According to the latest data from Coinglass, the GBTC discount rate has decreased from -48.89% at the end of last year to -5.51%, the lowest level since May 2021, indicating increased market confidence in its transformation into a spot ETF.
Meanwhile, the price of GBTC in the secondary market continues to rise, with an increase of over 22% in the past month, reaching a trading price of $35.65 per share.
Regarding the latest developments of other spot ETF applicants, James Seyffart pointed out that Hashdex recently had another meeting with the SEC. Unlike previous meetings with “Trading and Markets” or “Corporate Finance” department personnel, this meeting was specifically with staff from SEC Chairman Gary Gensler’s office, which may indicate the importance attached to the progress of ETF applications.
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Barry Silbert
ETF
GBTC
Grayscale
Hashdex
Bitcoin spot ETF