Grayscale Pushes Forward with Spot Bitcoin ETF, Engages in on-going Talks with SEC

2023-12-13, 02:56

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The SEC may approve several spot <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> ETFs applications between 5 and 10 January 2024.

Recently, the SEC had been holding meetings with prospective spot bitcoin ETF issuers.

So far, 12 asset managers have applied for spot bitcoin ETFs.

Keywords: Spot Bitcoin ETF, Grayscale spot bitcoin ETF, spot bitcoin ETF approval, SEC approval of a spot bitcoin ETF, BTC ETF, crypto ETF
## Introduction 
There has been much talk in the crypto market about the possible launch of spot bitcoin exchange traded funds (ETFs).  Many analysts believe that the approval of crypto ETFs is likely to increase the adoption and demand for cryptocurrencies. Grayscale, BlackRock, WisdomTree, Fidelity and Valkyrie are some of the asset management firms that have [applied for spot bitcoin ETFs](https://www.gate.io/de/blog_detail/3479/daily-news-czs-confession-boosts-the-approval-of-bitcoin-spot-etfs-multiple-defi-platforms-funds-stolen-accumulated-losses-exceeding-dollar150-million "applied for spot bitcoin ETFs").

In this post, we delve on the progress Grayscale has made in convincing the United States Securities and Exchange Commission to approve its spot bitcoin ETF. We will also discuss the possible timeframe for the SEC to approve spot bitcoin ETFs. 
## Advancement in Spot Bitcoin ETF Plans
On 22 November, Grayscale filed its revised prospectus for a spot bitcoin ETF with the SEC. It aims to convert its GBTC fund to a spot BTC ETF. In its latest filing, Grayscale is likely to have switched from its in-kind model to the “Cash” model, which is a safer model, to address the SEC’s major [concern on spot Bitcoin ETF applications](https://www.gate.io/blog_detail/3076/can-spot-bitcoin-etfs-become-market-catalysts-if-approved "concern on spot Bitcoin ETF applications").

Already, [Grayscale has](https://www.sec.gov/comments/sr-nysearca-2021-90/srnysearca202190-305159-785022.pdf "Grayscale has") met with the SEC to discuss its proposed [bitcoin ETF](https://www.gate.io/bitwiki/detail/731/bitcoin-etfs "bitcoin ETF").  It is important to note that over the years Grayscale maintained a healthy relationship with the SEC due to its Grayscale Bitcoin Trust (GBTC), it aims to convert to a spot crypto ETF now.

However, the SEC disapproved Grayscale’s first spot BTC ETF application, forcing the asset management firm to engage a federal court for legal assistance. Consequently, a panel of Federal judges concluded that the SEC was "arbitrary and capricious” in its disapproval of Grayscale spot bitcoin ETF application.

With that, the court ordered the SEC to review Grayscale’s application. A source which CoinDesk cites said that Grayscale recently opened negotiations with the SEC. As per CoinDesk, [Craig Salm, a Grayscale representative said](https://www.coindesk.com/policy/2023/11/08/us-sec-said-to-open-talks-with-grayscale-on-spot-bitcoin-etf-push/#:~:text=The%20U.S.%20Securities%20and%20Exchange%20Commission%20(SEC)%20has%20opened%20talks,could%20have%20momentous%20implications%20for "Craig Salm, a Grayscale representative said"), "Right now we're just laser-focused on constructively reengaging with Trading and Markets."

He added, “There are still things that have to be worked through. Overall, it's been a good engagement, and it's a matter of when, not a matter of if anymore.”

Although Salm did not provide finer details of their negotiations or conversations his feedback has created a positive sentiment within the market that the SEC may approve Grayscale’s application. Apart from Grayscale, the SEC is engaging other asset managers pertaining their spot crypto ETF applications.

**Read also: **
[CZ's Confession Boosts the Approval of Bitcoin Spot ETFs](https://www.gate.io/blog_detail/3479/daily-news-czs-confession-boosts-the-approval-of-bitcoin-spot-etfs-multiple-defi-platforms-funds-stolen-accumulated-losses-exceeding-dollar150-million "CZ's Confession Boosts the Approval of Bitcoin Spot ETFs")
[Former BlackRock MD Sees Shift in Sentiment Towards Spot Bitcoin ETF](https://www.gate.io/blog_detail/3317/blackrock-sees-shift-spot-btc-etf "Former BlackRock MD Sees Shift in Sentiment Towards Spot Bitcoin ETF")

Basically, the crypto sector is waiting for the SEC approval of a spot bitcoin ETF which will help to attract much investment for the industry. Institutional and retail investors are expected to pour more than $3 billion dollars into the sector within the first few months after the launch of a spot crypto ETF. The SEC’s approval of more than one BTC ETF will likely generate much more funds for the industry.

In the meantime, there are many major players in the asset management sector such as Amplify Investments, ProShares and Roundhill that have not yet entered the race to launch their spot crypto ETFs.

These organizations believe that the market is saturated, the marketing costs are high and the products are highly regulated. At the same time, they are not certain if there will be sufficient demand for these investment vehicles. 
## The Potential Spot Bitcoin ETF Approval Window
The spot bitcoin ETF approval is likely to occur between 5 and 10 January 2024. Since 6 and 7 fall on the weekend, the approval should occur within the week that starts on 8 January. James Seyffart’s, a Bloomberg analyst, forecast is based on the fact that the ARK decision deadline is 10 January.

Seyffart posted his forecast on X. [He wrote](https://twitter.com/JSeyff/status/1730327792066195501 "He wrote"), "Okay the window [for potential spot Bitcoin ETF approval](https://www.gate.io/blog_detail/3434/bitcoin-etf-approval-potential-catalyst-for-historic-crypto-bull-run "for potential spot Bitcoin ETF approval") is looking like it’s gonna be between Jan 5 & Jan 10 2024.”

Another analyst, Scott Johnsson, concurs with Seyffart. [He said](https://twitter.com/JSeyff/status/1730327792066195501 "He said"), “SEC is publishing to the federal register tomorrow (12/1) the Franklin/Hashdex delays. Quicker turnaround than usual indicates again this is about lining up potential approvals.”

Therefore, he also expects the approvals to occur between 5 and 10 January.  His reason for this is based on the SEC’s quick response to Franklin’s filing. [Seyffart commented](https://twitter.com/JSeyff/status/1730327792066195501 "Seyffart commented"), “Wow. SEC went super early on Franklin. They weren't due for another decision until Jan 1. Notably Franklin is the only issuer who didn't submit an updated S-1 yet. Wonder [if that has any impact here](https://www.gate.io/blog_detail/3461/glassnode-insights-finance-bridge-spotlight-on-spot-bitcoin-etfs-and-their-impact "if that has any impact here").”

According to Bloomberg the first deadline for Franklin and HashDex is 5 January as the following table shows.  
![](https://gimg2.gateimg.com/image/article/17024354331.png)
Estimates and Deadlines for Spot Bitcoin ETF Approval - Seyff (X)

The table shows 12 spot bitcoin ETF applications, some of which may be approved between 5 and 10 January 2024. Since some of these applications have previous approval windows it is most probable they will be approved this time around.

Also, the fact that Grayscale has hired John Hoffman, a former Invesco ETF executive, as a managing director shows the company’s confidence that the SEC will likely approve its spot BTC ETF. Hoffman is earmarked to become the head of distribution and strategic partnerships.
## SEC’s Delay in Hashdex Meeting Signals a Positive Outlook for Potential Bitcoin ETF Approval 
Seyffart has also given another possible indication of the SEC’s preparedness to approve several spot bitcoin ETFs in the near future. According to him, the SEC met Hashdex on 27 November, a sign of its ongoing engagement with the various asset managers that have filed for spot BTC ETFs.

[Seyffart posted](https://twitter.com/JSeyff/status/1730236396428816528 "Seyffart posted"), “[The SEC met with Hashdex](https://twitter.com/JSeyff/status/1730236396428816528/photo/1 "The SEC met with Hashdex") on Monday the 27th and then the SEC issued a delay order the next day on their application. This is another in a continuing <a href="/price/flow-flow" target="_blank" class="blog_inner_link">Flow</a> of indications that the SEC is working hard with potential Bitcoin ETF issuers on backend details and plumbing.”

The SEC’s meeting with Hashdex comes about a week after it met with BlackRock representatives, also to discuss their crypto ETFs. All these have increased the market’s anticipation that the SEC may approve more than one spot bitcoin ETF in January 2024. 
## Conclusion 
Several prospective spot bitcoin ETF issuers have recently met with the SEC to discuss issues related to their applications. Due to such meetings and other indications some investment analysts have predicted that the SEC may approve several spot bitcoin ETF applications in January 2024.
## FAQs for Spot Bitcoin ETFs
### Will Bitcoin spot ETF be approved?
The SEC is likely to approve one or more spot bitcoin ETFs between 5 and 10 January 2024. Currently, it is engaging the various prospective spot bitcoin ETF issuers.  
### What is a 3x leveraged Bitcoin ETF?
A 3X leveraged bitcoin ETF is a bitcoin exchange traded fund that seeks to return three times the value of the index being used. Although such ETFs have high returns they also have high risks.
### Is there a short ETF for Bitcoin?
A short ETF for bitcoin enables the investors to benefit when the price of bitcoin is falling. The ProShares Short Bitcoin Strategy ETF (BITI) is an example of a short ETF for bitcoin.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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