A wave of anticipated Bitcoin (BTC) spot ETF approvals appear days away from launch – yet one of the race’s largest players may be behind on its regulatory procedures.
Bloomberg ETF analyst Eric Balchunas noted on Tuesday that the firm’s latest S-3 filing for its Bitcoin ETF is still absent critical information that rival fund managers have already included in their applications.
As of January 2, Grayscale still hasn’t confirmed what firms will be “authorized participants” (APs) for its Bitcoin ETF.
APs are responsible for creating and redeeming shares of the ETF to keep its price joined at the hip with BTC at all times. At the Securities and Exchange Commission (SEC)’s request, Grayscale stated that APs will only deliver and receive cash for such activities, rather than actual BTC – but left blank spaces where the APs should actually be named.
“Not sure why since SEC wants to see it and they have been pretty cocksure about having one,” wrote Balchunas to X (formerly Twitter) on Tuesday.
When applying for ETF approval in June 2022, Grayscale announced that its APs would have been market-making giants Jane Street and Virtu. The company has even tweeted that it had an AP picked out already.
“Until we see we aren’t counting any horse as official,” added Balchunas. “Also, BlackRock, Fidelity et al did it, so why not be done with it?”
The SEC has held numerous meetings with Grayscale, BlackRock, and other Bitcoin ETF applicants over the past three months since losing its related court battle against Grayscale in August.
The agency’s more engaging tone has analysts all but certain that an ETF will be greenlighted by January 10 – the deadline for approving or denying the Ark/ 21Shares ETF application. Grayscale has also pressured the SEC to ensure that it approves all rival applicants simultaneously, if at all.
Last week, numerous fund sponsors updated their filings to include management fee rates – the annual cost imposed on investors to manage the BTC backing their shares. Though applicants like Galaxy and Fidelity have revealed competitive 0.59% and 0.39% rates respectively, both Grayscale and BlackRock are yet to unveil their rates.
As of today, Grayscale charges GBTC investors a 2% management fee, though CEO Michael Sonnhenshein has promised to drop the fee once the fund transitions into an ETF.
“Big work week,” posted Sonnhenshein to X on Tuesday.