Grayscale has updated its Bitcoin ETF documentation for the third time, while BlackRock and Valkyrie name JPMorgan and Jane Street as their authorized participants to purchase bitcoin on their behalf.
Digital asset investment management firm Grayscale Investments, a subsidiary of Digital Currency Group, has filed a new amended Bitcoin ETF application with the SEC.
Eric Balchunas, an ETF analyst at Bloomberg, explains that this new presentation makes it clear that Grayscale fund creations will be made in cash only, an issue that was widely discussed with the US securities regulator and which it was not willing to budge on.
Asset managers such as Grayscale, BlackRock, Ark Invest, and Fidelity, among others, sought SEC approval for fund creations and redemptions in kind, or in bitcoin. However, the SEC encouraged these managers to make the creations in cash, at least in this first wave of potential approvals, in order to minimize the risks associated with the cryptocurrency market.
On the other hand, Balchunas stressed that Grayscale Investments has left the name of the fund's authorized participant (AP) blank, although it was believed that the investment manager had already selected an institution for it.
Unlike Grayscale, BlackRock and Valkyrie Investments did disclose the names of their authorized participants, identifying JPMorgan and Jane Street as AP, in the case of BlackRock, already Janet Street and Cantor Fitzgerald, in the case of Valkyrie.
Authorized participants of Bitcoin ETFs are named
In addition to BlackRock and Valkyrie, other asset managers that have already named their authorized fund participants include Fidelity, WisdomTree and Invesco.
Balchunas said he was not sure why Grayscale had left the space where the AP name should go blank. “I’m not sure why, as the SEC wants to see it and they have been pretty confident that they have one,” the ETF analyst noted.
In the past, Grayscale had revealed that it intended to appoint firms Jane Street and Virtu Financial as authorized participants in its Bitcoin exchange-traded fund.
The Digital Currency Group subsidiary, which wants to transform its private Grayscale Bitcoin Trust (GBTC) into a Bitcoin spot ETF, said it has an AP, although the name of the AP was not reflected in the recently updated filing. Accordingly, Balchunas wrote that he would not count “any horses” as official until the investment management firm clarifies this detail in its ETF filing.
The deadline for the SEC to rule on Ark Invest's proposed spot ETF, January 10, is fast approaching, although the securities regulator's decision is likely to be known much sooner. According to a Reuters report, the SEC could rule on Bitcoin ETFs as early as this week. On the other hand, Cathie Wood, CEO of Ark Invest, assured that the dialogue with the SEC on this investment vehicle is very positive.
Meanwhile, the impact of the spot ETF has been felt in the price of Bitcoin, which is trading at around $45.200 per BTC, after rising 5,6% in the last 24 hours.
Analysts expect the potential approval of a Bitcoin exchange-traded fund in the US market to boost the price of the cryptocurrency to new highs. However, while a potentially massive long-term impact is estimated, which will mark a before and after for Bitcoin and the crypto industry, experts also point out that The ETF's short-term impact could be a bit disappointing for some, especially those who believe that the price of Bitcoin will rise into the stratosphere in no time.
Continue reading: SEC met with all Bitcoin ETF applicants via phone
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