Digital asset manager Grayscale reported overwhelming support in public comments for its app to launch a Bitcoin exchange-traded instant fund.
In a Monday letter to investors, Grayscale said that of the more than 11,400 letters the US Securities and Exchange Commission, or SEC, has received regarding a proposed Bitcoin (BTC) investment vehicle, “99.96 percent of these comment letters were supportive of Grayscale’s case” as of From 9 June. According to Grayscale, roughly 33% of letters question the lack of a BTC ETF in the US, since the SEC has already approved investment vehicles tied to Bitcoin futures, as has been the case with ProShares and Valkyrie.
“The actions of the Securities and Exchange Commission (SEC) over the past eight months […] have signaled increased recognition and comfort in the maturity of the underlying bitcoin market,” said Michael Sonnenchin, CEO of Grayscale. “The approval of every Bitcoin-related investment product strengthens our arguments as to why the US market deserves the Bitcoin ETF spot.”
The regulator is currently reviewing the Grayscale implementation that allows the company to convert Bitcoin Trust (GBTC) shares into a physically backed fund, which, if approved, would be the first immediate offer of a BTC ETF in the United States. The application is nearing the end of the 240-day review process, which began in November 2021 and ends on July 6.
Although Grayscale’s campaign to encourage public comment with the SEC has been going on since February, many industry experts have suggested that the regulator’s approval of such an offer is unlikely. The Securities and Exchange Commission rejected similar applications from NYDIG and Global X as recently as March and One River Digital in May. SEC chief Gary Gensler has often been central to interviews when asked when the commission might approve a Bitcoin ETF, saying in February that he would give the matter “careful consideration.”
“[In my opinion] the chances of GBTC being allowed to convert into an ETF next week are 0.5%,” said Eric Balchunas, an analyst at Bloomberg ETF. “About the same odds as the New York Jets winning the Super Bowl.”
Related: ProShares will launch an ETF with the aim of selling Bitcoin after dropping below $20K
It’s not clear what Grayscale’s application might do if the SEC rejects its application next week. The company said it was “unequivocally committed” to converting its BTC trust fund into an ETF, having appointed a former US attorney general in June to serve as its chief legal strategist for its implementation. In May, the digital asset manager launched a crypto-related ETF on the London Stock Exchange, Borsa Italiana and Deutsche Boerse Extra.