Crypto asset manager Grayscale has been cleared by the Securities and Exchange Commission for its Bitcoin exchange-traded fund (ETF)—but there's an important piece missing.
In the latest update, Greyscale did not specify who would be partnering with the organization as an authorized participant.
In the world of ETFs, an authorized participant is an organization that creates and redeems shares of a fund so that an investor can withdraw money.
The SEC usually does not put much pressure on traditional asset-linked ETF issuers to clearly name permitted participants in their filings as a condition. But it has been pointed out as an important step for all companies vying to launch a Bitcoin ETF.
Experts said this long-awaited product could be the final stage of the filing process after various reviews and revisions when the SEC asked for registration.
Last week, major companies called Blackrock and Valkyrie It has been named. Depending on who the participants collaborate with. BlackRock chose banking giant JP Morgan Securities and trading firm Jane Street as authorized participants. Valkyrie was named Jane Street and Cantor Fitzgerald.
Grayscale did not disclose fees associated with the proposed ETF, which other applicants have already done. Loyalty is out the door with a stated low fee of just 0.39%. BlackRock plans to charge 0.47%, while Invesco and Galaxy say their funds will stagger fees for the first six months and then charge 0.59%.
But Greyscale's application is unique: the asset manager wants to convert the popular Bitcoin Trust into a spot ETF after a long and drawn-out court battle. Bitcoin ETF will be different from it Grayscale Bitcoin Trust (GBTC) Because it allows investors to get their shares back. GBTC was also initially only available to accredited investors (those who met certain income requirements), while the Bitcoin ETF traded openly like a stock.
The SEC initially rejected Greyscale's application to convert the fund, citing many of the same risk and market manipulation factors it had used before. Then Grayscale sued the regulator and in August the federal appeals court Purchased The SEC was “arbitrary and capricious” in its denial. That means the SEC now has to reevaluate the application with other people.
Wall Street's top regulator has long applications from major companies to review such a Bitcoin ETF before it starts trading on the stock exchange.
The top regulator can still say no to applicants, but analysts say one could be approved this month.
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