As the eagerly anticipated deadline for Bitcoin ETF applications approaches, there are growing expectations that the US Securities and Exchange Commission (SEC) is prepared to approve spot Bitcoin ETFs.
However, Bloomberg’s ETF expert, Erich Balchunas, has shed light on a potential catch, revealing that the SEC will likely require clear language regarding cash-only creations and a signed agreement with an authorized participant (AP).
Could Grayscale’s GBTC Conversion Make Or Break SEC’s Decision?
In a recent post on X (formerly Twitter), Balchunas suggests that while Grayscale, one of the world’s largest crypto asset managers, has already fulfilled these requirements, its existing advantage in terms of embedded assets and volume may pose a challenge for the SEC in maintaining a “level playing field.”
According to Balchunas, the SEC’s primary concern is ensuring fair competition among all qualifying issuers. Consequently, the commission may view Grayscale’s potential conversion of its Grayscale Bitcoin Trust (GBTC) into an ETF as unfair due to the substantial advantage it would possess from the outset.
Balchunas highlights that with $20 billion in embedded assets and a daily embedded volume of $150 million, GBTC would instantly rank among the top 1% of all ETFs.
According to the ETF expert, this predicament places the SEC in a delicate position, as approving GBTC could risk becoming a “kingmaker,” biasing the race in favor of a single participant.
Cash-Only Bitcoin ETF Provide Advantages?
Balchunas also clarifies that including clear language on cash-only creations in
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Author: Ronaldo Marquez
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