Grayscale CEO Michael Sonnenshein in a discussion with Anthony Pompliano on May 6 said the SEC could soon approve the conversion of the Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETF. He believes the SEC thinking has evolved regarding Bitcoin ETFs as it approves two Bitcoin futures ETFs under the Securities Act 33, instead of the Investment Company Act of 1940.
MicroStrategy’s CEO Michael Saylor also supports the Grayscale Bitcoin ETF as the Bitcoin Trust already has billions of dollars in over 800,000 investor accounts. Moreover, investors have trust in Grayscale and do trades every day.
Grayscale CEO Expect Spot Bitcoin ETF Approval Under 1933 Act
Grayscale CEO Michael Sonnenshein says it is difficult to predict a time frame on when the SEC could approve the Bitcoin ETF. However, the firm is behind this initiative and will continue to advocate on behalf of investors until
that approval comes through.
He thinks the SEC and regulators’ understanding has changed in the last six years. Moreover, the SEC is bringing better regulations and rules for the industry and the asset class. The level of knowledge and the level of education that regulators are bringing to these conversations have changed dramatically.
“Industry in this asset class isn’t going away and so by investors not proactively continuing to advocate for this and then having regulators answer that call and bring these assets closer into the regulatory perimeter they’re really not helping or really protecting anybody.”
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Commenting on how the SEC sees the difference between creating a Bitcoin ETF from scratch versus the conversion
into a Bitcoin ETF, Grayscale CEO Sonnenshein said:
“They do need to understand that if they don’t bring this under their purview and allow this to become an etf have investors have that familiarity have that protection that the etf wrapper provides they’re really not fulfilling their mandate in protecting investors.”
He asserts the company and investors are awaiting the end of the 240-day period on July 6. As the spot Bitcoin ETF is new to the U.S. market, the rule change is currently under evaluation by the SEC.
If the conversion is not approved by the SEC, a lawsuit on the grounds of violation of the Administrative Procedures Act (APA) will be filed. The SEC is allowing bitcoin futures products into the market, but not allowing bitcoin spot products into the market under the same 33 Act.
The SEC’s hesitations may be due to the pricing. The bitcoin futures contract gets its pricing from the spot bitcoin exchanges. Similarly, a bitcoin spot product also gets its pricing from the spot bitcoin exchanges. The two bitcoin products are not treated alike.
The SEC Approves Valkyrie Bitcoin Futures ETF
The SEC has approved Valkyrie’s XBTO Bitcoin Futures ETF, which was filed under the Securities Exchange Act of 1934. This is the same rule under which Teucrium received approval for its Bitcoin Futures ETF. Therefore, the approval of two bitcoin futures ETFs under the 33 Act raises hopes that a spot bitcoin ETF approval will be approved soon.
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