Grayscale may have to buy and sell Bitcoin (BTC) in the past, according to a Bloomberg Intelligence report, in order to create and redeem ETFs. It explained that the buying and selling is taxable and could make the GBTC to spot ETF conversion more difficult. However, the business clarified that, for tax purposes, spot commodity ETFs are typically structured as grantor trusts. Grantor trusts, in essence, are exempt from capital gains tax, it added.
Because of the ETF’s assets’ carrying value, “no such spot commodity ETF that is a grantor trust would be at a disadvantage relative to any other spot commodity ETF.”
In the meantime, it appears that the same Grayscale filing for converting GBTC into a spot Bitcoin ETF is being considered by the SEC. Grayscale’s petition for a review of the Commission’s decision to deny the approval was granted on August 29, 2023, by the US Court of Appeals for the District of Columbia Circuit. Albeit the judgment didn’t straightforwardly arrange for the change of GBTC, it cleared a way for endorsement in a set course of events.
Is Approval Coming?
In the space of most recent fourteen days, organizations looking for spot Bitcoin ETF endorsement like Blackrock, Grayscale, Franklin Templeton and Devotion have held gatherings with the authorities at the US SEC. In a most recent, Bloomberg Knowledge examiner James Seyffart said the Blackrock delegates held consultations with the SEC once more, on December 14, 2023. Does this imply that the SEC intends to approve the first spot Bitcoin ETF in the United States during the next window of opportunity, which runs from January 6 to January 10, 2023?
Meanwhile, the spot exchange-traded fund (ETF) and the Bitcoin Halving event, both scheduled for the second quarter of 2024, are likely preparing institutional investors for a surge in liquidity. The Bitcoin (BTC) price is currently trading at its highest range in approximately 15 months.