The US Securities and Exchange Commission (SEC) has been bombarded with requests to approve a spot Bitcoin exchange-traded fund (ETF). The agency has so far rejected all such requests, citing concerns about manipulation and lack of transparency in the cryptocurrency market. However, that has not deterred digital asset management firms from continuing to push for a spot Bitcoin (BTC) ETF.
Two of the most recent applications have come from Bitwise and Grayscale. Both firms have met with the SEC to discuss their plans, and according to reports, Grayscale feels more confident about its chances of success following the meeting.
On Wednesday, May 11, Grayscale met with officials from the Commission to discuss its application to convert its Bitcoin Trust into a spot ETF. According to a report from CoinDesk, the meeting was deemed “productive” by Grayscale.
In fact, a Grayscale representative reportedly said that the firm remains “encouraged by [its] ongoing engagement with the SEC” and that it intends to “maintain an open dialogue with regulators and policymakers as [it] look[s] ahead to July 6.”
Grayscale also argued that converting its BTC Trust into an spot ETF would “protect investors and the public interest, allowing the product to better track net asset value while giving investors the freedom to invest in Bitcoin in a safe and secure manner.”
In the meeting, Grayscale also reportedly stressed that an spot ETF instead of the current trust structure would “allow better NAV tracking, reduce discounts and premiums, and unlock approximately $8B for investors.”
Grayscale, which has about $20 billion in assets under management, initially applied for the conversion in October 2021. The SEC is currently reviewing the application and is expected to make a decision by July 6.
Last week, MicroStrategy’s Michael Saylor expressed support for Grayscale, tweeting:
It took clarity and conviction to set up $GBTC, and now @Grayscale is demonstrating courage and commitment in their campaign to convert GBTC into a Spot #Bitcoin ETF. They deserve your support. If you agree please let the @SECGov know. https://t.co/0uawul3sMg
— Michael Saylor⚡️ (@saylor) May 10, 2022
Grayscale’s productive meeting with the SEC is positive news for the cryptocurrency industry, as the agency has been hesitant to consider a spot BTC ETF in the past. However, with Grayscale continuing to work with the regulator and make progress on its application, it is possible that a spot Bitcoin ETF could be approved in the near future.
This would provide a major boost to the cryptocurrency market and could potentially lead to even more institutional investment in digital assets.
Price Action
BTC lost 5.30% during today’s trading and changed hands at $29.000, accelerating its monthly decline to about 30%.
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