It has been a long battle for Grayscale in its efforts to convert its Bitcoin fund into a cash ETF. In June 2022, the Securities and Exchanges Commission (SEC) denied Grayscale’s request to convert to a cash Bitcoin ETF. Following this, the company waged a legal battle against the regulatory agency.
Against the backdrop of the SEC’s ongoing actions against crypto-currency-based companies, this case could prove vital in boosting market sentiment in favor of crypto-currencies.
Grayscale management expects the decision on the Bitcoin spot ETF to be made as early as the fall of 2023. It appears that the company has now placed all its bets on the SEC suit. With the Grayscale Bitcoin Trust (GBTC) being the largest Bitcoin fund in the world, even a minor outcome in Grayscale’s favor could be a huge boost for the crypto community. The SEC’s Grayscale case will soon get underway, as arguments are scheduled to be heard in court starting in March 2023.
What to expect from the SEC’s Grayscale case
S’speaking to Yahoo News on Monday, Grayscale CEO Michael Sonnenshein discussed the company’s plan of action in the case. The company will base its argument on the fact that cash-based Bitcoin ETFs will offer greater investment security and regulatory oversight than futures-based ETFs. Given the liquidity issues at its parent company Digital Currency Group (DCG), the company recently said it would consider a buyback offer of up to 20 percent of shares. Responding to this proposal in the case of the court ruling against the approval of the Grayscale spot Bitcoin ETF, Sonnenshein said that the tender offer would not really be an optimal solution in the grand scheme of things.
The CEO said the cryptocurrency’ecosystem has produced tremendous leverage in the past two months. He also said that the upcoming Ethereum Shanghai upgrade and the halving of Bitcoin in 2024 could act as huge catalysts for the crypto-currency market.