- Grayscale has filed an updated prospectus with the SEC for a spot Bitcoin ETF, but has not specified authorized participants or fees
- Grayscale’s proposed ETF would differ from its existing Bitcoin Trust by being publicly traded and allowing redemptions
- Approval for a Bitcoin ETF remains uncertain despite multiple applications, with the SEC facing pressure to decide soon
Grayscale Investments has filed an updated prospectus with the SEC regarding its proposed spot Bitcoin ETF. The latest filing comes as the SEC faces mounting pressure to approve the first Bitcoin ETF in the US.
Missing Details on Authorized Participants
Unlike other recent filings, Grayscale has not specified who its authorized participants will be. Authorized participants are crucial for creating and redeeming ETF shares so investors can cash out. The SEC has previously indicated this information is an important part of any Bitcoin ETF application.
How Grayscale’s ETF Would Differ From its Existing Bitcoin Trust
Grayscale currently runs a Bitcoin Trust which trades under the ticker GBTC. However, GBTC has key differences from an ETF:
- GBTC was only open to accredited investors initially, while a Bitcoin ETF would be publicly traded like a stock
- GBTC doesn’t allow investors to redeem shares, unlike an ETF
- Grayscale wants to convert the Trust into a spot Bitcoin ETF after a legal battle with the SEC
Uncertainty Remains on Fees and Approval
In addition to the lack of details on authorized participants, Grayscale has not specified the fees for its proposed ETF. Competitors like Fidelity have announced fees as low as 0.39%.
It remains unclear if or when the SEC may approve a Bitcoin ETF. However, given the number of applications, analysts believe approval could come this month. The SEC will have to make difficult decisions on these high-profile applications soon.
Conclusion
While Grayscale’s latest filing keeps its application alive, uncertainties around fees and authorized participants mean it faces stiff competition. All eyes are on the SEC to see if 2023 will finally be the year for a spot Bitcoin ETF.
