Grayscale Submits Bitcoin ETF Filing with SEC to Adopt Cash Redemption Model
Grayscale has submitted an updated filing to the Securities and Exchange Commission, paving the way for its GBTC to transition into a spot Bitcoin exchange-traded fund (ETF) with the adoption of a cash redemption model.
According to Bloomberg Intelligence ETF research analyst James Seyffart, Grayscale has just submitted an amended S-3 filing with the SEC to convert GBTC to Bitcoin ETF, attempting to adopt the cash redemption model.
“Even Grayscale is accepting the SEC’s Cash-only creation/redemption edict. Looks like they’re bending the knee,” said Seyffart. BlackRock and ARK Invest and 21Shares have also previously turned to this model for regulation and compliance purposes.
Essentially, through the cash creation and redemption model, the investors must use cash for transactions in exchange for Bitcoin holdings. On the contrary, the investors cannot “hand in btc in exchange for ETF shares like in most ETFs,” according to Bloomberg Intelligence ETF analyst Eric Balchunas.
Grayscale finally surrendering to cash-only creations, was a big holdout. Pretty sure they have an AP agreement (a crucial last step) so that would check all the boxes. That said, still a mystery whether they will be allowed to go on day one of the Cointucky Derby https://t.co/Wm7TfD3zkP
— Eric Balchunas (@EricBalchunas) December 26, 2023
The filing indicated that “Participant can only submit Cash Orders, pursuant to which the Authorized Participant will deposit cash into, or accept cash from, the Cash Account in connection with the creation and redemption of Baskets.”
“The Trust is currently able to accept Cash Orders,” wrote the filing. “However, and in common with other spot Bitcoin exchange-traded products, the Trust is not at this time able to create and
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