The Securities and Exchange Commission (SEC) should approve all applications for spot bitcoin exchange-traded funds (ETFs) simultaneously, Grayscale Investments CEO Michael Sonnenshein said Monday (Dec. 18).
In an interview with Bloomberg TV, Sonnenshein said that this approach would create an even playing field for investors and prevent any disadvantage to the Grayscale Bitcoin Trust (GBTC) if other products were allowed to launch before it, Bloomberg reported Monday.
Grayscale, a prominent digital management firm, is one of more than 10 companies trying to get a spot bitcoin ETF debuted, according to the report.
The firm, which earlier this year won a pivotal ruling against the SEC in its pursuit to convert its trust into an ETF, is ready to list GBTC as an ETF, the report said. Sonnenshein has committed to lowering the trust’s 2% expense ratio once it starts trading as such.
However, the push for a bitcoin exchange-traded fund has been ongoing for over a decade, and a crucial deadline in early January is approaching, per the report.
If regulators approve the application from ARK and 21Shares, it is expected that other applicants may also receive regulatory blessing, according to the report.
Nevertheless, one key issue that issuers are currently working through is the mechanism for in-kind versus cash redemptions for the funds, the report said. In-kind redemptions involve exchanging the fund’s underlying securities with a market maker, while cash redemptions involve selling the securities to distribute cash to shareholders.
Sonnenshein said that in-kind redemptions work well, protect investors, create tight spreads and enhance liquidity, per the report. He said that breaking with convention at this pivotal moment for spot-Bitcoin ETFs would not be beneficial.
PYMNTS reported in October that the price of bitcoin, the world’s largest cryptocurrency, was being driven up by the possible approval of the first U.S. spot bitcoin ETFs.
With companies like BlackRock and Fidelity vying to become the first to offer these products, crypto proponents say ETFs would lead to greater adoption of digital assets.
On Wednesday (Dec. 13), PYMNTS reported that Goldman Sachs noted a growing interest in cryptocurrency derivatives trading among clients as the market awaits the approval of spot bitcoin ETFs.
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