Michael Sonnenshein, CEO of Grayscale Investments, is ready for a spot Bitcoin exchange-traded fund (ETF) irrespective of the SEC’s decision. The crypto-focused asset management is preparing for all possible scenarios.
Sonnenshein said the company has been encouraged by the SEC’s actions over the past eight months. It signaled an increased recognition of and comfort with the maturity of the underlying Bitcoin market.
The Securities and Exchange Commission had approved the first ETFs to invest primarily in Bitcoin futures contracts in October 2021. Last week, the agency gave approval to a bearish vehicle managed by fund issuer ProShares, which is designed to deliver the inverse performance of the S&P CME Bitcoin Futures Index. Sonnenshein believes ProShares’ approval shows that Bitcoin’s price discovery is supported by a derivatives market. It’s robust enough to offer short exposure to retail investors.
The executive highlighted that the Grayscale Bitcoin Trust (GBTC) is operationally ready to convert into an ETF when it is given the go-ahead. However, SEC continues to prohibit spot-based ETFs from coming to market. As such, the Grayscale team has been preparing for all possible post-ruling scenarios. Earlier this month, the asset management firm brought in Donald B. Verrilli Jr., as a senior legal strategist to work with Grayscale’s in-house counsel and its attorneys at Davis Polk & Wardell. Grayscale said this was to ensure that the firm has the strongest possible team of legal minds ready to support the Bitcoin ETF application.
It should be noted that Grayscale hasn’t ruled out a potential lawsuit if SEC rejects the application.
