Scott Johnsson, a notable lawyer from Davis Polk, has make clear a possible clue relating to the approval of a spot Bitcoin ETF by the US Securities and Change Fee (SEC) on November 2. The hypothesis arises following the SEC’s choice to not contest the US Courtroom of Appeals for the District of Columbia Circuit’s judgment, which favored Grayscale’s bid to transform its Bitcoin Belief (GBTC) right into a spot Bitcoin ETF.
Johnsson’s tweet introduced consideration to an upcoming closed-door assembly scheduled for November 2, revealing: “November 2 – I consider that is the primary closed assembly of the Commissioners because the Grayscale enchantment deadline expired and the mandate was delivered. Agenda contains resolving litigation claims and admin proceedings. There have been leaks out of the closed assembly forward of the BITO launch.” He added, “It’s a date of curiosity, however no certainty we’ll get any information.”
Historical past Repeating For Bitcoin?
This closed-door assembly, outlined within the “Sunshine Act Discover,” is about for two:00 pm ET on the aforementioned date, and although closed to the general public, its subjects will revolve round “establishment and settlement of administrative proceedings” and “decision of litigation claims.”
The Bitcoin group is keenly observing this unfolding situation, particularly after the ProShares Bitcoin Technique ETF (BITO) – the primary US Bitcoin Futures ETF – took off on October 19, 2021. Not solely did it mark a big milestone for Bitcoin, however BITO was the quickest ETF to build up over $1 billion in belongings after its launch.
It’s attention-grabbing to notice that simply days earlier than BITO’s launch, Bloomberg highlighted a leak from a SEC closed assembly held on October 14. Bloomberg was knowledgeable that the SEC “is poised to permit” the primary US Bitcoin futures ETF to start buying and selling” after they “have been filed underneath mutual fund guidelines that SEC Chairman Gary Gensler has mentioned present ‘vital investor protections.’”
With Grayscale’s spot Bitcoin ETF in view, Johnsson alludes {that a} leak akin to October 2021 may be on the horizon. The large query will then be whether or not the SEC will solely approve Grayscale or all candidates on the similar time.
In latest weeks, the SEC has acquired quite a few amendments from candidates corresponding to BlackRock, Constancy, Ark Make investments, and VanEck. Bloomberg’s ETF specialists consider that this can be a good signal {that a} Bitcoin ETF is near approval, whereas the SEC is making an attempt to get all candidates on the identical degree with the amendments.
Bloomberg’s James Seyffart tweeted yesterday about the newest modification by Valkyrie: “UPDATE: Valkyrie Funds joins the prospectus modification practice for his or her spot Bitcoin ETF. Issues nonetheless shifting behind the scenes.”
Johnsson’s observations on this modification inflow additionally stood out, mentioning, “SEC disclosure evaluation cadence is often within the neighborhood of 2-4 weeks for a standard S-1. It is going to be attention-grabbing to see whether or not we get any uploaded feedback from the SEC and/or additional amendments from the likes of Ark/21 and others within the subsequent two weeks.”
Moreover, he famous a big spotlight from SEC chair Gensler’s calendar dated June 15, 2023 – the day Blackrock lodged its spot ETF software. Johnsson identified, “Pretty hectic and features a White Home [WH] Interagency assembly and assembly with Council of Financial Advisors [CEA] chair. The interagency assembly was the primary such assembly he had in 2+ years as chair of the SEC.”
Spot ETF Rejection Nonetheless Attainable?
Regardless of the hopeful indicators, some consider that Gensler may unexpectedly flip the tables on spot Bitcoin ETF purposes. Dave Nadig posits this as a doable “Gensler semi-comedic rug-pull,” Bloomberg’s ETF analysts, James Seyffart and Eric Balchunas, contemplate such a transfer as “amazingly sadistic.”
Responding to those speculations, Johnsson remarked, “Ha, I’ve been spending weeks/months making an attempt to think about a method to make sense of this course of and lead to a Gensler rug. It’s been tough… however the risk at all times looms.”
At press time, Bitcoin traded at $34,314.
Featured picture from Shutterstock, chart from TradingView.com
