Bitcoin ETF concerns are growing at Greyscale as CEO speaks out.
Crypto asset manager Grayscale held another meeting with the US Securities and Exchange Commission as the final ETF details were released. Meanwhile, the company's CEO says clients will lose out if it fails to convert Grayscale Bitcoin Trust (GBTC) into a spot ETF.
On December 20, Greyscale CEO Michael Sonnenschein told Bloomberg that GBTC investors in the Greyscale Bitcoin Trust will be hurt if the SEC doesn't allow them to convert their funds into ETFs at the same time as others are allowed.
The rise of grayscale concerns
“I think the SEC and what it does, really, wants to create a level playing field,” he said.
At least a dozen companies are vying for a Bitcoin ETF license, including giants BlackRock and Fidelity. Meanwhile, Greyscale is trying to convert its existing GBTC trust into a spot fund.
All must happen simultaneously to prevent one company from gaining first-mover advantage, Sonnenschein said.
“We've been public advocates that when the commission prepares to issue the necessary certifications for niche products to come to market, it should all happen at once — issuers ready to launch their products should come in. Get out the door at once.”
Greyscale says GBTC is ready to list with reduced ETF fees once trading commences. The trust currently has a 2% fee, which is higher than most ETFs.
Read more: How to prepare for a Bitcoin ETF: A step-by-step approach
If Sonnenschein does not allow the SEC to change,
“Hundreds of thousands of investors in GBTC will be in a terrible position if they are hurt by other products coming to market before it.”
Additionally, a key issue is whether ETFs use in-kind or cash redemptions. In order to protect investors, it appears to be preferred by Greyscale. However, the SEC has been bailing out broker-dealers with cash to prevent them from regulating Bitcoin.
ETF latest news
Earlier this week, BlackRock “bowed the knee”, creating a cash offering in line with SEC requirements.
ETF analyst James Seifert said Grayscale met with the SEC this week to provide final details about the listing.
Meanwhile, ETF issuers Bitwise and Hashdex have launched their marketing campaigns.
On December 21, Bitwise released its second Bitcoin announcement, bringing the total to three crypto announcements in just a few days.
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