Grayscale Submits Revised Bitcoin ETF Application, Omits Authorized Participants Details
Summary:
Grayscale, a cryptocurrency asset manager, has submitted a revised application for a Bitcoin exchange-traded fund (ETF) without detailing the authorized participants. The update insists on cash-only transactions for shares. Eric Balchunas, Bloomberg's senior ETF analyst, questioned the omission as the SEC requires this information. Furthermore, the filing didn't include any fee information. Grayscale's action contrasts with other companies like Fidelity, WisdomTree, and Invesco Galaxy who listed their authorized participants in recent filings. The SEC's responses to the recent submissions from potential Bitcoin ETF issuers are expected by January 10.
Grayscale, the manager of cryptocurrency assets, has put forward a revised proposal for a Bitcoin exchange-traded fund (ETF), but without specifying details of the parties authorised for participation. Eric Balchunas, senior ETF analyst for Bloomberg, drew attention to this updated filing through X (previously known as Twitter). Balchunas pointed out that Grayscale had clarified that payment and receipt of cash for shares by authorised participants in this proposed ETF is the only acceptable method.
The analyst also noted that Grayscale did not include any names of authorised participants in the revised documents submitted to the United States Securities and Exchange Commission (SEC). He questioned this omission, given that the SEC requests this information and Grayscale has been very confident about having one. The issue of a fee was also not addressed, which Balchunas identified as a significant missing piece of the puzzle.
Reports from Cointelegraph on December 29 indicated that seven companies submitted updated Form S-1 applications, each aiming to pioneer the initial Bitcoin ETF products in the U.S. WisdomTree, Fidelity, and Invesco Galaxy included the names of their respective authorised participants in these new filings. Virtu and JPMorgan were selected by Invesco Galaxy, while Jane Street Capital were listed by both WisdomTree and Fidelity.
The role of the authorised participant is to have the capacity to create and redeem shares of an ETF: financial institutions or companies with this ability are awarded this position. In June 2022, Grayscale stated its intention to include Virtu Financial and Jane Street as authorised participants in its proposed transition of its Grayscale Bitcoin Trust into an ETF.
Further commentary by Balchunas highlighted the point that it is still not understood why Grayscale chose not to specify its authorised participants, whereas other companies have detailed this information.
On December 27, Grayscale presented an updated S-3 filing to the SEC. This took place on the same day that Barry Silbert—CEO of Grayscale’s parent company Digital Currency Group—announced his resignation from the board of directors of Grayscale.
The deadline for the SEC to present its response to the recent submissions from future Bitcoin ETF providers is January 10. Professionals in the industry have predicted that, by the end of the first week of 2024, the SEC will have provided answers to the applying firms.
Published At
1/2/2024 4:56:21 PM
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