Kenne Michael 
Grayscale representatives met with the SEC to deliberate on the specifics of its primary Bitcoin trust, which the company intends to transform into a spot Bitcoin exchange-traded fund (ETF).
However, SEC issued a memo on Nov. 20 that revealed that five Davis Polk law firm representatives, in addition to Grayscale CEO Michael Sonnenshein, legal chief Craig Salm, and ETF head Dave LaValle, met with the SEC’s division of trading and markets.
Discussions “concerned NYSE Arca, Inc.’s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E,” according to the memo.
According to a filing cited by Bloomberg ETF analyst James Seyffart, Grayscale disclosed that it had established a Transfer Agency and Service Agreement with BNY Mellon.
Meanwhile, the bank shall serve as the intermediary for its Grayscale Bitcoin Trust (GBTC), overseeing shareholder account management and facilitating the issuance and redemption of shares.
Seyffart highlighted in a Nov. 21 X (Twitter) post that the trading and markets division is responsible for approving or rejecting 19b-4s, which are forms utilized by self-regulatory organizations to notify the SEC of proposed rule changes.
In addition, Grayscale’s agreement with BNY Mellon, according to Seyffart, was “likely something that was always going to be required at some point” and does not suggest that the GBTC will be converted soon.
Scott pointed out the Transfer Agent agreement with BNY Mellon in $GBTC's 8K today because he apparently has eyes everywhere. That said, this agreement is likely something that was always going to be required at some point. Says nothing about timing IMO https://t.co/8eIYNMWzzw
— James Seyffart (@JSeyff) November 21, 2023
ETF Store President Nate Geraci stated in a Nov. 22 X post that the “most substantive aspect of Grayscale’s SEC meeting yesterday is that GBTC ‘conversion’ is being called ‘uplisting.'”
“That doesn’t indicate any issues with conversion to ETF,” he said.
Geraci added that Grayscale has a significant opportunity to dominate this ETF category if it “uplists GBTC to NYSE Arca on the same day other issuers launch spot BTC ETFs” and if they actively compete on fees.
IMO, most substantive aspect of Grayscale's SEC meeting yesterday (& today's subsequent 8k filing) is that GBTC "conversion" is being referred to as an "uplisting"…
That doesn't indicate any issues w/ conversion to ETF (contrary to the below). https://t.co/yAMBOsRlUs pic.twitter.com/nCZ8Z1ndNO
— Nate Geraci (@NateGeraci) November 22, 2023
Geraci said that even with BlackRock in the equation, Grayscale will enter the markets on day one with $20 billion in assets under management.
The SEC registration statement on Form S-3, which Grayscale filed on Oct. 19, indicated the company’s intent to list GBTC shares on the NYSE Arca under the ticker symbol GBTC.
In October, a U.S. appellate court issued a mandate for the SEC to reassess its denial of Grayscale’s proposal to convert the GBTC to a spot ETF.
BlackRock and Fidelity, among other prominent asset managers, are vying with the SEC for authorization to offer spot Bitcoin ETFs.
Furthermore, Seyffart maintained that “things are continuing to move forward” and that his probability of having an exchange-traded fund (ETF) approved by Jan. 10, 2024, or earlier, at 90%, remained unchanged.
