As SEC Stalls on a Bitcoin ETF, Grayscale Is Campaigning

Key Takeaways

Grayscale has launched a campaign in a bid to gain public support for its spot Bitcoin ETF application.
Last year, Grayscale filed an application to convert GBTC to a Bitcoin spot ETF.
The firm has asked American investors to submit comments in support of its application to the SEC.

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Grayscale Investments has rolled out a campaign to garner support to persuade the Securities and Exchange Commission to approve its spot Bitcoin ETF application.

Grayscale Aims for Support for Spot Bitcoin ETF

Grayscale Investments is pulling out all of the stops to convince the SEC to approve its spot Bitcoin ETF application.

As the SEC weighs its decision, the world’s largest crypto asset management firm has launched a campaign asking Americans to show support for its application.

The campaign appeals to U.S. investors to submit comments to the SEC asking the agency to approve the firm’s application.

In October 2021, Grayscale revealed its plan to launch a spot Bitcoin ETF by converting its GBTC trust fund–the biggest crypto-based investment product in the world. Grayscale announced its plans as the SEC approved the first Bitcoin futures ETFs offered by ProShares, Valkyrie, and others.

But unlike the funds tracking futures derivatives, Grayscale wants to offer an ETF backed with spot Bitcoin. The firm says it believes that a spot ETF would be a better alternative to derivatives-based products, and that investors should have a choice in how they want obtain Bitcoin exposure.

A key part of the due process to assess Grayscale’s ETF application is a 240-day review period, for which the SEC has requested public comments. While the review period is still open, the firm has created a landing page on its website with details on how Americans can submit comments to the SEC regarding its application.

Announcing the campaign in a Tuesday press release, Grayscale CEO Michael Sonnenshein said:

“We will use the strength of Grayscale’s brand and resources to continue to advocate for these investors, and ensure that the investing public is aware of the unique opportunity they have to voice their opinions directly to the SEC–a critical part of our existing regulatory process.”

Crypto enthusiasts have been hoping for a spot Bitcoin ETF for many years. Prior to the campaign launch, the SEC had already received hundreds of public comments related to Grayscale’s plans for a spot Bitcoin ETF.

“The hundreds of comments already submitted on behalf of GBTC’s conversion to an ETF further demonstrates that this issue is of the utmost importance to investors,” Grayscale CEO Michael Sonnenshein added.

So far, the SEC has expressed reservations about giving the green light to firms looking to offer a spot Bitcoin ETF, partly due to risks and custodial responsibilities that come with Bitcoin custody. To date, the SEC has rejected all requests for spot Bitcoin ETFs.

Grayscale differs from prior spot Bitcoin ETF requests in that it has operated a regulated Bitcoin trust fund for several years. Still, as the application is still under consideration, it remains to be seen whether the SEC will approve it.

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