Physical Redemption Model Backed by CEO, Emphasis on Simultaneous Approval of Bitcoin Spot ETF

The U.S. Securities and Exchange Commission (SEC) is reviewing more than 10 Bitcoin spot ETF applications and revisiting Grayscale’s conversion of its Bitcoin trust fund GBTC into a Bitcoin spot ETF. Apply.

In an exclusive interview with Bloomberg on the 18th, Grayscale CEO Michael Sonnenshein called on the SEC to approve multiple applications at the same time to create a level playing field. He said that when the SEC is ready to approve the listing of spot products, it should immediately approve the listing of all operationally ready Bitcoin spot ETF issuers.

Recently, Grayscale defeated the SEC’s lawsuit, and the judge asked the SEC to reconsider its previous decision to refuse to convert GBTC into a Bitcoin spot ETF. Michael Sonnenshein said that Grayscale is ready to transform GBTC into a spot ETF and list it. Once GBTC is traded in the form of an ETF, the product's fees will be reduced (the current annual management fee for GBTC is 2%).

If the SEC approves other Bitcoin spot ETFs but refuses to approve GBTC’s conversion application, Michael Sonnenshein reminds us that this will have an extremely negative impact on the hundreds of thousands of investors in GBTC. This means that these investors may not be able to convert their GBTC shares at a reasonable value, while other investors will have more flexible investment channels through the newly approved Bitcoin spot ETF. This unequal treatment may harm the interests of GBTC investors and have a negative impact on the entire market

support the physical redemption model

Market expectations are that the SEC is expected to approve the first tranche in mid-January next year Bitcoin spot ETF, however, a problem currently faced by issuers is whether to adopt a cash redemption model or a physical redemption model? In this regard, Michael Sonnenshein revealed that Grayscale tends to support the physical redemption model: Our positioning is that this model works well and can protect investors, create smaller spreads, create liquidity, and ultimately create a positive investor experience. Since we are at a critical point where we are about to see a spot Bitcoin ETF launch, we shouldn’t break the rules.

According to previous reports, the SEC is said to be more inclined to adopt a cash redemption model. BlackRock, Ark Fund/21Shares, WisdomTree and other applicants have submitted updated documents for the Bitcoin spot ETF to the SEC on Monday to express their acceptance of the SEC’s insistence on adopting a cash redemption model and seek to obtain SEC approval in January next year priority approval.

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