Grayscale Expands ETF Team Amidst SEC Approval Uncertainty

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Grayscale, a well-known crypto asset manager in the U.S., has given a sneak peek into its hiring plans for its ETF team. This move suggests that the company is feeling positive about its ongoing efforts to secure approval for a Bitcoin ETF.

Grayscale made this announcement through a tweet that has already caught the attention of the financial community, amassing more than half a million views. This shows how much interest there is in this topic.

This step comes amidst a larger discussion in the industry about the U.S. Securities and Exchange Commission’s (SEC) stance on Bitcoin ETFs. Grayscale has been engaged in a back-and-forth with the SEC over its decision to approve leveraged Bitcoin ETFs while rejecting applications for spot Bitcoin ETFs. Grayscale has criticized this decision as arbitrary.

Last year, the SEC turned down Grayscale’s proposal to convert its Bitcoin Trust (GBTC) into an ETF, leading the company to take legal action. They argued that a spot ETF was essentially the same as a futures ETF, which the SEC had previously given the green light to.

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Recent data from ycharts indicates that the discount of GBTC to its net asset value (NAV) has reduced to 27.49%, with its shares trading around $20. Additionally, over the past month, GBTC shares have risen by nearly 43%, surpassing Bitcoin’s 17% increase during the same period. Analysts believe that this surge in performance could be linked to BlackRock’s application for a Bitcoin spot ETF, which encouraged other traditional financial institutions like Fidelity to apply for similar ETFs.

The main point of contention between Grayscale and the SEC revolves around the approval of a 2x leveraged Bitcoin futures ETF. This ETF uses leverage to double the daily performance of the S&P CME Bitcoin Futures Daily Roll Index. Grayscale argues that this exposes investors to a riskier investment product compared to traditional Bitcoin futures exchange-traded products.

If the SEC leans towards Grayscale’s argument, it could potentially set a precedent for approving future Bitcoin ETFs, reshaping the landscape of crypto investments. With many financial players anxiously awaiting the SEC’s decision, Grayscale’s indication of expanding its ETF team suggests the company is prepared to take action depending on the outcome.