Recent developments regarding Grayscale’s Bitcoin Investment Trust have put the company in good stead to be first to launch a Bitcoin exchange-traded fund (ETF). In an industry first, the Digital Currency Group-owned asset management firm recently became an SEC reporting company voluntarily.
Grayscale Investments filed to register as a Securities and Exchange Commission (SEC) reporting company in November last year. After a period of 90 days, now passed, the filing has become effective. This makes the company the first cryptocurrency fund index to be subject to SEC reporting. Henceforth, it will make extensive financial reports to the regulator via 10-q and 10-k filings, and be subject to financial auditing.
The voluntary move appears to be an effort to boost Grayscale’s credibility with regulators. Despite a Medium post from Grayscale Investments saying that the registering was an attempt to classify the existing Trust as an ETF, not all industry observers are convinced.
For cryptocurrency analyst and founder of Messari, Ryan Selkis (@twobitidiot), the move is a “savvy regulatory/compliance signal.” In a recent post, the founder reasons that the recent developments have created a “sense of inevitability” that Grayscale will receive the regulatory nod first for a Bitcoin ETF.
I think we'll finally see a Bitcoin ETF in the next 12-18 months and it will be @GrayscaleInvest that gets the nod.
— Ryan Selkis (@twobitidiot) January 22, 2020
“All that’s left really is for the SEC to finally recognize that this quasi-public vehicle is already available, liquid, and widely coveted by retail investor… At some point, common sense will have to prevail. It strikes me that will happen sooner rather than later based on this latest move.”
The launch of a Bitcoin Exchange Traded Fund dominated cryptocurrency news a couple of years ago. In fact, Grayscale itself filed its own ETF application in 2017. However, it quickly withdrew it that same year. The SEC has so far rejected every proposal for a Bitcoin ETF, something that Selkis argues is actually hurting investors:
“… the Commission’s own foot-dragging on an “official” ETF approval is quantifiably hurting those same investors by perpetuating the premium that exists on the publicly floated shares.”
After a slew of rejections over 2017 and 2018, the issue of a Bitcoin ETF has quietened down a lot. The launch of Bakkt, with its promise of physically-settled Bitcoin futures, took a lot of the Bitcoin ETF hype. However, as BeInCrypto has reported previously, the platform largely disappointed investors that believed the new trading venue would see the planet’s largest money managers taking up vast positions in Bitcoin.
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