In the wake of the US Securities and Exchange Commission’s (SEC) recent decisions, the Bitcoin community’s focus sharpened. Notably, the SEC chose not to challenge the judgment from the US Court of Appeals for the District of Columbia Circuit, which favored Grayscale’s aim to transform its Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
Scott Johnsson, a renowned attorney from Davis Polk, highlighted a significant event on the horizon. He drew attention to a forthcoming closed-door meeting slated for November 2 at 2:00 p.m. ET. The topics for this meeting, as per the “Sunshine Act Notice,” encompass “institution and settlement of administrative proceedings” and “resolution of litigation claims.”
This meeting assumes greater significance, especially considering the launch of the ProShares Bitcoin Strategy ETF (BITO) on October 19, 2021. This futures ETF not only marked a milestone for Bitcoin but also became the swiftest ETF to garner over $1 billion in assets post its debut.
Additionally, days before the BITO’s introduction, a leak from an SEC closed meeting was highlighted by Bloomberg. This leak suggested the SEC’s inclination to sanction the premier US Bitcoin futures ETF for trading. This authorization was based on mutual fund regulations, which, according to SEC Chairman Gary Gensler, offer “significant investor protections.”
However, the spotlight now shifts to Grayscale’s spot Bitcoin ETF. Johnsson hints at a potential leak similar to the one in October 2021. Consequently, the Bitcoin community is left wondering if the SEC will greenlight only Grayscale or all applicants concurrently.
In recent times, the SEC has noted multiple amendments from esteemed applicants, including BlackRock, Fidelity, Ark Invest, and VanEck. These changes are perceived positively by experts at Bloomberg, suggesting that a Bitcoin ETF might be nearing its approval. Moreover, they believe the SEC aims to bring all applicants to a consistent standard through these amendments.
James Seyffart from Bloomberg recently updated on Valkyrie Funds joining this amendment wave. He noted that there’s movement behind the scenes regarding their spot in Bitcoin ETF.
Johnsson too provided his perspective on this surge of amendments. He remarked that the SEC’s usual review cadence for a standard S-1 is between 2 and 4 weeks. Hence, the Bitcoin community eagerly awaits potential comments from the SEC or further amendments from industry players in the upcoming fortnight.
Furthermore, an intriguing observation by Johnsson was from SEC Chair Gensler’s calendar dated June 15, 2023. On this day, Blackrock submitted its spot ETF application. Gensler’s schedule was packed, including a notable White House Interagency meeting, the first of its kind during Gensler’s tenure of over two years at the SEC helm.
However, the Bitcoin community remains cautiously optimistic. Some speculate that Gensler might introduce unforeseen changes to the spot Bitcoin ETF applications. While some term this potential scenario as a “Gensler semi-comedic rug-pull,” Bloomberg’s ETF analysts, James Seyffart and Eric Balchunas, consider such a twist “amazingly sadistic.”
Johnsson, responding to these theories, stated that visualizing a logical outcome in line with the speculated “Gensler rug” has been challenging. However, the looming uncertainty remains.
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