Grayscale updates its Bitcoin ETF application following SEC talks

• Grayscale submits an updated filing for its Bitcoin ETF days after engaging in talks with the SEC.
• Amendments include a shift in the fee structure from monthly to daily fees.
• Grayscale’s ETF proposal involves the conversion of an existing investment fund.

In a move signalling potential progress in the spot Bitcoin exchange-traded fund (ETF) approval process, Grayscale has submitted an updated filing for its spot Bitcoin ETF just days after engaging in talks with the US Securities and Exchange Commission (SEC).

The amended S-3 prospectus reflects feedback from the SEC, showcasing the company’s responsiveness to regulatory discussions.

Grayscale’s amendments to its Bitcoin ETF application

Grayscale’s latest filing on November 22 involves an amended S-3 prospectus, indicating the company’s commitment to meeting SEC requirements.

While Bloomberg ETF analyst James Seyffart suggests that the changes may not be groundbreaking, it highlights Grayscale’s ongoing dialogue with the SEC. Notable adjustments include a modification in the fee structure, shifting from monthly to daily fees. This move, as clarified by a company spokesperson, is a structural enhancement rather than an immediate fee reduction.

The updated filing comes on the heels of a recent meeting between members of the SEC’s Division of Trading and Markets, Grayscale, and the law firm Davis Polk on November 20. The discussions centred on the listing of Grayscale’s proposed ETF on NYSE Arca, with Grayscale’s CEO, Michael Sonnsenhein, actively participating.

Why Grayscale’s ETF proposal stands out

Grayscale’s ETF proposal stands out in the market, involving converting an existing investment vehicle into an ETF. Despite its uniqueness, the SEC’s engagement with Grayscale is seen as a positive indicator for the broader ETF landscape.

Following a court victory earlier this year, the SEC’s obligation to review Grayscale’s application underscores the evolving dynamics of the Bitcoin ETF space.

Meanwhile, Grayscale Bitcoin Trust (GBTC) trades at a discount of -11.86% below its net asset value, adding an intriguing element to the ongoing developments in the crypto investment arena.