Grayscale's Bitcoin ETF Approval is Inevitable, a Question of 'When, Not If'

Grayscale, a leading digital asset management firm, continues to express confidence in the eventual approval of a Bitcoin ETF. This includes the potential transformation of its Grayscale Bitcoin Trust (GBTC) from an open-ended trust traded on the OTCQX Market into a spot Bitcoin ETF, with aspirations to list it on the NYSE Arca exchange.

In recent discussions, Grayscale's Chief Legal Officer Craig Salm and Chief Financial Officer Edward McGee addressed questions about this possible shift. Salm, in a blog post for the company, stated his belief that U.S. regulatory approval for a spot Bitcoin ETF is more a question of "when" rather than "if." He emphasized that upon approval, Grayscale would promptly work to transition GBTC to NYSE Arca.

However, Grayscale has not provided a specific timeline for this conversion, citing the unpredictable nature of such processes. Speculations from industry analysts suggest potential dates for the SEC's decision, with some expecting movement in early January.

Grayscale's push for converting GBTC into an ETF stems from a lawsuit filed against the SEC in 2022. The firm argued that being an ETF would allow the fund to align more closely with Bitcoin's real-time price. Following this, the U.S. Court of Appeals mandated the SEC to review Grayscale's application, a significant step forward for the firm.

GBTC, which holds a significant portion of the total Bitcoin supply, currently trades at a discount to its net asset value. Grayscale believes that converting to an ETF would enable the trust to track Bitcoin's price more closely. The SEC, in compliance with the court's order, is now officially reviewing Grayscale's proposal for the ETF, as indicated in a recent memo that detailed discussions between SEC officials and Grayscale's executives regarding the listing and trading of GBTC shares under specific NYSE Arca rules.