Grayscale’s Fund Becomes SEC Reporting Company, One Step Closer To A Bitcoin ETF?

Digital asset manager Grayscale has disclosed a major milestone, it has become a U.S. Securities and Exchange Commission (SEC) reporting company. Many across the crypto industry are celebrating the achievement and speculate on the implication for Bitcoin and other cryptocurrencies that comprised the company’s products.

Grayscale filed a Registration Statement on Form 10 for its Grayscale Digital Large Cap Fund (GDLC). The Commission granted the form and made it effective. Although the company has two products that report to the SEC, the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE), the GDLC is the

(…) first diversified digital currency investment fund to become an SEC reporting company with its shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as Grayscale announced via a press release.

The company has filed additional Registration Statements on Form 10 with the U.S. regulator. The next products to receive SEC approval are the Grayscale Bitcoin Cash Trust, Grayscale Ethereum Classic Trust, Grayscale Litecoin Trust.

Craig Salm, Vice President of Legal at Grayscale Investments said that the company seeks to achieve a higher level of transparency to meet their clients’ standards. He added:

Events such as the Fund becoming our third SEC reporting company, and the additional Form 10 filings, signal that there is continued investor interest in gaining exposure to the growing digital currency ecosystem within existing regulatory frameworks, and that regulators continue to engage with market participants in the asset class.

Grayscale Follows Its Roadmap To Bring A Bitcoin And Crypto ETFs Live

As part of its new status with the SEC, the Grayscale Digital Large Cap Fun will file its report under 10-Qs, 8-K, and 10-Ks forms. Early investors on the GDLC will be able to benefit from “earlier liquidity” due to a reduction in the statutory holding period from 12 months to 6 months.

The GDLC is comprised of a crypto basket of 67.49% Bitcoin, 25.35% Ethereum, 4.30% Cardano, 1.03% Bitcoin Cash, 0.96% Litecoin, and 0.87% Chainlink. The press release reveals that the approval of this Registration Statement has bigger implications for Grayscale’s plans. Especially to those related with a Bitcoin Exchange Traded Fund (ETF):

This is another milestone reinforcing Grayscale’s commitment to move its digital currency investment products forward through the product development pipeline described in an April 2021 blog post about Grayscale’s roadmap to launching digital currency ETFs.

The SEC has over a dozen Bitcoin ETF petitions pending approval. In the past, the Commission has maxed out the time required to issue a decision. This time it could be different due to several external factors.

First, the number of petitions suggests a high demand from institutional investors to obtain crypto exposure. These investors’ hunger for an ETF could lead them to invest in Canada’s Bitcoin and Ethereum ETF to detriment of Grayscale’s products. If the U.S. wants to catch up with other countries, it must act soon.

The new SEC Chair, Gary Gensler, could be the right man to approve a crypto ETF. Gensler seems to have a deeper understanding of Bitcoin and the crypto industry. In any case, U.S. Senator Elizabeth Warren has demanded the SEC to provide answers to crypto regulations no later than July 28^th, 2021.

At the time of writing, Bitcoin trades at $33,508 with a 1.2% loss in the daily chart. The first cryptocurrency by market cap was rejected after crossing the $34,000 mark and has been slowly trending downwards in the past day.