Grayscale CEO Expects Decision on Attempt to Overturn SEC's ETF Rejection by End of 3Q

AUSTIN, Texas — Grayscale expects to learn by the end of the third quarter whether it will be allowed to turn its $17.5 billion Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF), the asset manager’s CEO, Michael Sonnenshein, said Wednesday at CoinDesk’s Consensus 2023 conference.

The Securities and Exchange Commission (SEC) last year turned down the asset manager's request to convert the biggest BTC$95 972,51 trust into an ETF. The conversion could help Grayscale eliminate the infamous discount for the product; GBTC's market value is far below the actual value of all the bitcoin it holds.

Grayscale (which, like CoinDesk, is owned by Digital Currency Group) then sued the SEC over that decision, and its CEO, Sonnenshein, said Wednesday that he anticipates a decision in that case by the end of September.

"We're eagerly anticipating a decision from the courts between now and then," he said.

Read full coverage of Consensus 2023 here.

The SEC has defended its rejection, saying its reasons for denying Grayscale's applications were consistent with its earlier decisions to deny every other spot bitcoin ETF application it had received.

Sonnenshein didn't say if he expects the ruling to be in Grayscale's favor. However, he expects to "work expeditiously" with the SEC to ensure that the conversion happens and list the product on the NYSE Arca exchange, if the decision goes in favor of the asset manager.

In terms of future of the crypto industry, Sonnenshein said the price of the digital assets won't be the best indicator of the health of the ecosystem. The underlying technologies, developments and use cases that are drawing investors today are going to look very different further down the road.

"Even though it's my ninth Consensus, this is still early days for crypto," he concluded.

CORRECTION: (April 27, 2023 01:25 UTC): Corrects size of GBTC to $17.5 billion.