The CEO of Grayscale, Michael Sonnenshein, has expressed reservations about the need to potentially refile the firm’s spot Bitcoin ETF application despite winning a recent court case against the Securities and Exchange Commission (SEC). The court ruling could impact the firm’s previous ETF product filing.
Grayscale’s legal success would allow the company to convert its Bitcoin Trust (GBTC) into an ETF that directly invests in Bitcoin. However, Sonnenshein’s cautious statements indicate that the road ahead may still have uncertainties.
Sonnenshein stated:
“We will have to see upon the final operational procedures that come through that final mandate that the court will issue. We don’t know what the final opinion will say until we reach the end of that period, which is 45 days from the ruling.”
Despite the favorable ruling being seen as a setback for the SEC, it is not an immediate green light for the launch of a spot Bitcoin ETF. The SEC’s approval is still pending, and it could engage in further delays and tactics against an industry it has been actively scrutinizing throughout the year.
Both Grayscale and the SEC are reviewing the details of the decision, and Grayscale plans to provide more information about the conversion process in due time.
Sonnenshein noted that the company has not received further communication from the SEC post-ruling, and he suggested that there shouldn’t be any remaining grounds for the SEC to deny such products from entering the market.
He also mentioned that Grayscale is committed to reducing fees when GBTC converts to an ETF. The current fee structure of GBTC stands at 2%, which is considerably higher than the fees associated with typical ETFs.
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Additionally, the discount for GBTC, which represents the difference between the fund’s net asset value and the market value of the asset, has significantly decreased since the court decision. The discount is now at -18%, an improvement from nearly -50% in December 2022 after the collapse of the FTX and broader crypto markets.
While the market’s confidence in the conversion has increased, analysts suggest that the discount may not reach zero until the conversion becomes official. Bloomberg Intelligence ETF analyst James Seyffart raised the odds of a Bitcoin ETF approval this year to 75% following the recent developments.
