Grayscale Makes Third Amendment To Bitcoin ETF Application: What to Expect as SEC Decision Looms

Grayscale Bitcoin Trust (GBTC) has filed its third amendment (amendment no. 3) to the U.S. Securities and Exchange Commission (SEC) in a bid to convert GBTC into a spot Bitcoin exchange-traded fund (ETF). 

As the regulatory window for potential spot Bitcoin ETF approval opens between January 5-10, 2024, Grayscale's latest filing has drawn attention for several intriguing reasons.

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Amendment No. 3: The Latest Move in the Spot Bitcoin ETF Chessboard

The recent filing, submitted on January 2, is the third amendment to Grayscale's S-3 filing, specifically tailored to convert GBTC into a spot Bitcoin ETF. 

While it clarifies that the amendment is solely for certain exhibits and does not alter the prospectus provisions, it notably refrains from naming an authorized participant (AP) for the conversion – a departure from practices observed in filings by other prominent entities in the space.

Despite CEO Michael Sonnenshein confirming the presence of an AP since 2017, the absence of a named entity in this filing has sparked speculation. Bloomberg senior ETF analyst Eric Balchunas highlighted this on X, questioning why Grayscale deliberately omitted such crucial details.

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SEC Decision Dynamics: Sell-the-News Scenario Looms Large

As the SEC is considering the approval of bitcoin spot ETFs between January 8 and January 10, experts anticipate a sell-the-news scenario, given the substantial build-up in market anticipation. 

A K33 Research report suggests that while approval is a 20% chance, a 75% probability leans towards a sell-the-news outcome. Senior Analyst Vetle Lunde emphasizes the exposure of traders ahead of the verdict, making profit-taking an attractive option in the aftermath of approval.

Despite the SEC's recent updates and meetings, Grayscale's filing remains unclear, and the sell-the-news sentiment looms.