Grayscale’s Bold Challenge to SEC: Calls for ‘Kind Redemption’ in GBTC and Simultaneous Approval of All Bitcoin Spot ETFs
Grayscale’s Push for Bitcoin Spot ETF Approval
Grayscale Investments, a leader in digital currency investing, is challenging the United States Securities and Exchange Commission (SEC) on its approach towards Bitcoin spot ETFs. Grayscale’s CEO Michael Sonnenshein, in a recent Bloomberg interview, advocated for a fair competitive landscape in the approval of multiple Bitcoin spot ETF applications, including their own Grayscale Bitcoin Trust (GBTC) transformation into a spot ETF.
Further reading：Bloomberg ETF Analyst Predicts: Bitcoin Spot ETF Approval Looms, Ether Spot ETF Likely by May Next Year
Sonnenshein’s Vision for Equal Treatment
Sonnenshein believes that the SEC should create an even playing field by simultaneously approving all Bitcoin spot ETFs that are operationally ready. This call follows an earlier victory against the SEC, where a judge mandated the reevaluation of their decision to refuse GBTC’s conversion into a spot ETF.
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GBTC’s Potential Transformation
Grayscale is prepared to convert GBTC into a spot ETF, which would result in reduced product fees (currently at a 2% management annual fee). This conversion, according to Sonnenshein, would offer a more favorable investor experience with tighter spreads and enhanced liquidity.
The Debate: Kind vs. Cash Redemption
A key issue for ETF issuers like Grayscale is choosing between Kind redemption and cash redemption models. Sonnenshein revealed Grayscale’s preference for the Kind redemption model, citing its efficiency in protecting investors and creating liquidity. However, SEC appears to favor the cash redemption model, as evidenced by other firms like BlackRock, Ark Funds/21 Shares, and WisdomTree adapting their applications to align with SEC’s stance.
The Implications of Rejecting GBTC’s Conversion
Sonnenshein warns that rejecting GBTC’s conversion while approving other Bitcoin spot ETFs would place hundreds of thousands of GBTC investors at a significant disadvantage, affecting their investments negatively.
Further reading：Bitcoin ETF Breakthrough: SEC Discusses Kind and Cash Redemption with BlackRock and Grayscale
Key Takeaways
- Grayscale Advocates for Simultaneous Approval: Calls for fair competition in the approval process of Bitcoin spot ETFs.
- GBTC’s Potential Conversion: Grayscale is prepared for GBTC’s transformation, which could lower fees and enhance investor experience.
- Debate Over Redemption Models: Grayscale supports Kind redemption, while the SEC seems inclined toward cash redemption.
- The Impact of SEC’s Decision: Disapproving GBTC’s conversion could adversely affect its large investor base.
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Keywords: Grayscale, Bitcoin Spot ETF, GBTC, SEC, Michael Sonnenshein, Kind Redemption, Cash Redemption, Cryptocurrency, Investment, Financial Markets
