The world’s largest digital assets manager Grayscale continues to push the envelope further for getting its spot Bitcoin ETF back in the market. On Tuesday, November 21, Grayscale engaged in discussions with the SEC and revealed the execution of a Transfer Agency and Service Agreement with BNY Mellon for its spot Bitcoin ETF.
Grayscale Meets the SEC
On November 20, a memo from the SEC revealed that Grayscale executives, including CEO Michael Sonnenshein, held discussions with the SEC’s division of trading and markets. The meeting focused on the proposed rule change by NYSE Arca, Inc. to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E.
Grayscale subsequently disclosed the execution of a Transfer Agency and Service Agreement with BNY Mellon, as per a filing shared by Bloomberg ETF analyst James Seyffart. BNY Mellon will serve as the agent for Grayscale Bitcoin Trust (GBTC), managing the issuance and redemption of shares and overseeing shareholder accounts.
Scott pointed out the Transfer Agent agreement with BNY Mellon in $GBTC‘s 8K today because he apparently has eyes everywhere. That said, this agreement is likely something that was always going to be required at some point. Says nothing about timing IMO https://t.co/8eIYNMWzzw
— James Seyffart (@JSeyff) November 21, 2023
In a November 21 Twitter post, Seyffart noted that the trading and markets division is responsible for approving or denying 19b-4s—a form used to inform the SEC of a proposed rule change by a self-regulatory organization. He clarified that the agreement with BNY Mellon is likely a requirement and doesn’t necessarily indicate an imminent conversion of GBTC.
The meeting with the SEC comes within a week of the securities regulator delaying the decision on spot Bitcoin ETF further.
When Is Bitcoin ETF Coming? Will Grayscale Dominate
James Seyffart shared his perspective on recent events, stating that despite inquiries, the odds, in conjunction with Eric Balchunas, remain unchanged and cannot exceed 90% by January 10th. However, Seyffart noted that, in their view, developments are still progressing positively.
On the other hand, crypto mom and SEC Commissioner Hester Pierce also shared her thoughts on future developments. Speaking with Bloomberg TV correspondent Sonali Basak, Pierce said that “There’s no reason for us to stand in the way of Bitcoin ETF”.
She added that the Graysscale’s victory over the SEC for converting its GBTC product to a spot Bitcoin ETF gave them a bit of a nudge to positively think in this direction. However, she remained tight-lipped over whether the SEC is considering approving all Bitcoin ETF applications at once.
Earlier @kaileyleinz & @sonalibasak asked SEC commissioner @HesterPeirce some great questions about ongoing conversations at the SEC related to spot #bitcoin ETFs. She mostly couldn’t answer them but she hinted that the @Grayscale court case likely gave the SEC a bit of a nudge pic.twitter.com/qBOvJW2SLY
— James Seyffart (@JSeyff) November 21, 2023
Grayscale stands a genuine chance to lead in the ETF sector if it can successfully transfer GBTC to NYSE Arca simultaneously with other issuers launching spot BTC ETFs. This, coupled with a focused strategy to compete on fees, could position Grayscale for dominance, according to ETF Store President Nate Geraci.
Geraci mentioned that Grayscale is poised to enter the market with $20 billion in assets under management from day one, even with the presence of BlackRock. Bloomberg expects the Bitcoin ETF market, to be a $100 billion market. Thus, Grayscale could be having a lion’s share in this.
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