Grayscale Moves Ahead on Plans to Convert Bitcoin Trust to ETF

Grayscale CEO Michael Sonnenshein told ThinkAdvisor that the SEC is "inherently giving a blessing to the entire Bitcoin market if they're blessing the derivative of that market." The two markets are "inextricably tied to one another."

With today's filing by the NYSE — exchanges as well as asset managers must file with the SEC before an ETF can trade — Grayscale joins about a dozen asset managers whose applications to trade an ETF based on spot Bitcoin are pending before the SEC. (More than a handful of firms have also filed to trade a Bitcoin futures ETF.) The SEC has as long as 240 days to decide the fate of the Grayscale Bitcoin ETF.

To date, the SEC has not approved any of the pending spot Bitcoin ETF applications, choosing instead to postpone any decision within the permitted time frame, but deadlines are approaching for several of the filings.

SEC Chairman Gary Gensler and several commissioners have expressed concerns about potential fraud and manipulation in the crypto market, which would impair investor protection and market integrity — the agency's key responsibilities to uphold. Gensler has also said the agency needs more authority to regulate the exchanges on which Bitcoin trades.

The trading and clearing of Bitcoin futures are regulated by the Commodity Futures Trading Commission (CFTC).