Topic: Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 8. (Read 16372 times)

SEC have never shown any evidence of announcing early. they have always waited out deadlines or extended deadlines
i doubt they would wait out a year and then suddenly decide before the next set of deadlines in january that december will suddenly be magically a eventful time to break the cycle and announce before year end.

plus this weeks deadlines on the applications that are propositioning "in-kind" transfers frm shares to btc direct,  has nothing to do with any "final" decision. much like greyscale  last year when SEC asked them to list coinbase as third party. it wasnt a final deadline that demanded a final decision/acceptance event

im thinking jan-march something will happen. but it would more then likely be blackrock as my odds, compared to grayscale.
grayscale dont have ETF experience nor proof of money management for pension funds.. plus alot of legal battles with grayscales sister companies.. so blackrock has better positives than grayscale

here is what i think of genslers mindset
saying no/declining/delaying does not affect gensler personally.. he does not go out of pocket for objecting.. the lawsuits are paid via our tax money not his salary
infact the longer he can delay or say he is working on things the more grants/budget/expenses he can claim to cover 'costs' of evaluation.

however if he just blindly accepted all ETF as written. and one of them go wrong and cause millions of pensioners to lose their pensions.. his personal head would be on the chopping block. he would be answerable for his actions for letting a ETF start without oversight,due diligence

so dont expect a rush. there is no benefit to sec/gensler, in gensler rushing things

Yes.  There are some members who believe that the January 10, 2024 deadline is more realistic and others who believe that it has good odds of being approved this year.  I don't have strong feelings on the topic, but I am a bit more inclined to speculate that the ETFs have good chances of being approved this year instead of the first 10 days of 2024... but I am not going to hold my breath, and also if they end up getting pushed off after January 10th, then I would not be totally surprised even though it seems that there are a lot of indications that seem to show that approval is imminent. .which has me leaning towards believing this year has greater odds, and I might even be willing to entertain a friendly 50/50 bet, in which I take this year as my preferred side of the bet.

To me, I doubt they would even give any approvals, even after the Spot Bitcoin ETF applicants provides the Cash Creates in two weeks. I bet they'd request for more time to review the cash Creates, maybe this could be for another two weeks, who knows. We might likely not be expecting an ETF approval from SEC this year.

You absolutely correct. But looking at it from a different angle, While the prospects of ETFs getting approved can impact trust fund prices relative to their NAV, you can't elude the fact that trust funds and ETFs can serve different purposes and relatively attend to different investor preferences. For example, trust funds may have different investment strategies, focus on specific sectors or regions. This differentiation can create a special value proposition for trust funds that may certainly give investors reason to choose trust funds even with the approval and presence of an ETFs.

Yeah, but I already explained that I did not really pick the article in order to describe any substance beyond the fact that the SEC has likely put off its approval of any BTC spot ETF by two weeks because I am pretty sure the SEC made similar requests to all of the ETF applicants to the extent that the ETF applicants might not have already had such clarity in their Spot ETF applications.


Your theory (or your explanation regarding what is going on) sounds backwards Gormicsta.  

I would think that if there are other kinds of ETF product on the markets or other somewhat competitive products available then that could effect the direction whether premium or discount, and surely if there are prospects of an ETFs getting approved and coming onto the market, then that could well affect the differentiations in trust fund price (and the directions) relative to NAV... so I doubt the direction and/or the distance from NAV is a reflection of the quality of the underlying product.. .not that I am trading or playing around with any of those products, in regards to by preference for spot and also my preference for BTC rather than screwing around with shitcoins whether buying directly or buying them through some kind of a trust fund or an ETF.

Well that's certainly because the demand of LINK from the investors drives its trading price. the demands are pretty high, Hence the reason they can trade at a premium, investors are willing to pay more than the NAV of the funds. They  are pretty optimistic about the prospects of the assets so you can't blame them for being willing to pay a premium for those assets. I believe the investor's sentiment isn't that optimistic about BTC, ETH and ETC, Hence the reason the funds are traded at crazy discounts. It sure is Mind blowing lol.

the particular ETF applications involed in the link, dealing with the "cash creation" detail.. are applications that are not even insync with grayscale a couple years ago. though their consultation period may be a couple weeks for this detail. they are still a far behind grayscales progress..
the company you linked is not going to get an approval in december. they just have a deadline to sort themselves out to re apply with an application that sounds more closer to what grayscale was offering 2 years ago.


its mostly the SEC doesnt want to see actual real BTC assets on the nasdaq. for many reasons.. but yea i can and most can see that the 'in-kind' (shares-btc direct 'liek for like') would be a tax avoidance method.. they want to prevent, by forcing nasdaq traders to be forced to cash out at each trade to trigger cap-gains

well when you look at how relaxed regulators are with auditing any employers pension reserves for their employees. and how many companies syphon their employees pension pots.. its obvious that things like coinbase could just ruin things not just from their own customers but from their corporate clients using coinbase as a custodian..
the SEC is attempting to mitigate risk. but its still mostly asking these companies to do self-review have policies internally to self regulate so that the SEC doesnt have to send in personel every month to audit reserves..

i too find it strange they would rather have one coinbase custodianise 3 main ETF institutions rather then suggest independent key holders(multisig) not all affiliated with coinbase(and thus DCG)

Speaking of those funds, it is absolutely mind blowing how they are trading: none at NAV, BTC and ETH at discount, ETC at huge discount, while other LINK for example at an astonishing premium.

My main reason for bringing it up was ONLY to suggest that the dates for approval might be December 1st at the soonest, and I was not really even caring to get into any of the details of the meaning  of what they were doing, even though I presumed that it would have been for various kinds of control and/or manipulation prevention reasons and that sourcing of the coins would be known, and sure maybe there is also the tax monitoring advantages .. whether that was a central motivation or not, we already should have known that self-custody is not part of any the current expectations of any of the ETFs.. so that surely is part of the reason that the ownership of any ETF is inferior to owning spot BTC.. but surely there are going to be both institutions and also some individuals who end up getting into BTC because of the ETF price exposure that is allowable through their retirement savings accounts that would not allow for the direct purchasing and/or custody of BTC.

I suppose many of us have concerns about BIG players owning and controlling so many BTC, even if they have fiduciary duties to the supposed real owners, while we still have a not your keys not your coins situation that could end up having various blow-up scenarios that are bad for the users and perhaps even bad for bitcoin as a whole since some of the direct power of owning and controlling BTC would be held by the custodian who may well not be acting in the interest of the person who believes that he owns bitcoin when he only owns claims to bitcoin...or maybe he ONLY owns bitcoin price exposure..

Absolutely correct.
There have apparently been public quotes on the OTC market for a few of the Grayscale Trusts that were made available through private placements. On the OTCQX Best Market, individual and institutional investors may also trade the Trusts' shares publicly.
https://www.grayscale.com/crypto-products

in a bitcoin spot ETF .. they do not trade in bitcoin... they trade in shares for fiat..
the idea actually is the brokerdealers  manage, as agents of the ETF... a basket of SHARES which are sold for fiat

its already been known that the SEC wants to know which btc exchanges will secure, audit and transfer the actual bitcoin (EG  coinbase for greyscale/blackrock)

so lets say broker-dealer "ABC investments" wanted to be spot ETF agents..
they would with fiat, go to coinbase. pay $XXXXX fiat for a basket worths of BTC and coinbase would custody it and register the basket with greyscale. making it part of greyscales trust.. not ABC investments property/custody/ownership..
grayscale will then give ABC investments a lump of GBTC shares. where the GTBC shares are ABC investments property/customer/ownership.. which ABC investments can sell shares to its customers

ABC investments would not be trading bitcoin with its customers

im sure the link your wrote got details in wrong order/misunderstood. but im thinking the SEC is talking to coinbase to ensure coinbases systems are ready to register the baskets with blackrock, greyscale, ark.. so that agents can hand fiat over and the ETF hand shares back in a secure audited way via coinbase ratifying, securing and registering the custody of coins to allow ETF to create the shares to give agents access to

it a known think that dealers cant do bitcoin direct with their customers... its kinda the whole entire point of this whole 10 year saga of trying to get an ETF that shadows the spot price. rather than direct trade bitcoin itself.

its just that some applications are not doing what greyscale, blackrock and ark are doing.. some smaller applications have wanted to self custody actual btc and allow direct btc redemptions, which the SEC doesnt want and are saying no to.

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the reasons the SEC want it the greyscale,blackrock,ark way.. of a middleman between agent and etf doing the custody. is this:

by a agent not doing "in-kind" share->btc redemption.. and instead SEC wanting just share->cash trading.. is that the trades trigger cap-gains

IF a broker/agent were to take a customers cash. give them shares then later at sell redeem to btc for the customer.. the customer is not then triggering cap-gains because they fiat-share-btc has not looped back to fiat to trigger gains.. its a "in-kind" non taxable swap to not see gains

so yes the sec wants the dealer-agent not to self custody, offer btc, do share->btc redemptions. its for tax reasons

Regarding the spot ETF deadline and also in regards to what might be happening with the SEC and the ETF applicants, did you not hear the news from the last 24 hours Franky?

Of course, you can look it up yourself from various sources, but the essence of the news seems to be that the SEC has given two weeks to the ETF applicants to provide their "cash creates" details to the SEC.

SEC allegedly wants spot Bitcoin ETFs to do cash creates, not crypto, after possible meet-up with exchanges

which seems to mean that ETF providers have to go through the exchanges that they list on their application in terms of buying the underlying BTC whenever anyone buys ETF shares through them.

To me, that also seems to indicate that the soonest that any Spot ETF would be approved would be two weeks from yesterday.. which would be right around December 1, at the earliest.. .and sure, the theory is that all of them would be approved at once, and presumptively that would include the Grayscale conversion of their trust to an ETF in the mix of the approvals, once the approvals come out.

they are not pro-active. they are reactive/retroactive

they wait for reports to come to them. and have other departments or private business to collect data for them. and only IF a report raises to a risk standard do they then react to get court orders to retroactively audit/investigate old historic data for a crime.

i would love it if regulators actually audited custodians pro-actively and also ensured custodians has some bankruptcy protection/hacker insurance to protect users funds where the insurer just pays out should the business go bad. whereby with audits and compliance the business can just start-up and operate knowing there is some "security" in its exchange..

this whole setting a deadline and on last minute moving goalposts shows they are not actually doing any active work
when the grayscale vs sec deadline came for sec to appeal. they didnt make a decision to not appeal and announce it early to start the next period. they waited to the last day, said nothing and just let the deadline passing be their answer to if they would appeal or not

there was another deadline on nov 17th to possibly give a ETF announcement.. again no response just let the deadline pass. now most people are waiting until january for next deadline..

the SEC is not fit for purpose and act like they dont even know their own role. they cant even categorise what is a commodity or asset properly to decide if its their jurisdiction or not to act on..

the SEC needs an overhaul. and the replacement should be more prioritising consumer protection not consumer policing via their businesses they regulate

can you precise if SEC is "useful" in any sense for its people ?

SEC has never responded to all applicants with progress at the same time
SEC has never responded to all applicants with adjustment requirements at the same time
SEC has always let the time run out before responding to applicants individually to that applicants own deadline

even the decision not to appeal was not a mid week announcement. the SEC let the timer run out

the SEC has never shown any reason to respond early before deadlines nor shown multi response to all applications at the same time

the ETF applicants that did not file first know they wont get responses  first/equally...
their only HOPE to skip the queue is by having a better application that ticks all the SEC requirement boxes avoiding any back and forth communication/adjustments. to fast track one before the other by just being the best candidate.. but thats a hope.. SEC still shows they wait til deadline day even if they know they will reject one

My rationale are:

• SEC has got a beating in court against Grayscale, that was rejected for “inconsistent and capricious reasons”. The SEC was respectful of this sentence, as they didn’t appeal (and didn’t use the “fake news” pump to their advantage). This made the SEC realise they had to move on with their “passive aggressive” strategy.
• SEC is actively working with major issuers to fine tune their filing. We saw many filing update from many issuers over the past weeks. This make me think all the filings are approaching their final state
• SEC realise that there is a huge “first movers advantage” in the ETF industry. Authorising only a few ETF, means picking a winner. After months of filing negotiations this could lead to so many causes for so much amount of money the SEC could be destroyed in court.

For all these reasons I guess all the ETF will be approved in the immediate vicinity of the final deadline in January.

everything you have said does NOT show that the SEC will make a multi-acceptance decision on the same day before deadlines
where are your logical responses of indepth thought and proof that there will be a multiple acceptance day.. so far in your many posts you have not shown any reason or rationale or evidence that multiple ETF will get accepted on same day before deadlines, you have only shown your hopes
(dont get me wrong, i share your hopes.. but rationally and logically, expectations differ from hopes)

the very evidence that the SEC waited until the very last minute to give rejection response SOLO to grayscale alone, shows the sec dont rush to respond before deadlines, nor give multiple applicant responses at same time

real life examples show the situation of grayscale is not a multi ETF accept/rejection on same day.. emphasis: grayscale is proof they look at each applicant differently and respond on different dates/deadlines

in short and double emphasis: they did not give all applicants a response when they gave grayscale bad news this year

Absolutely not.
Each application has different submission date and different deadline, and usually the SEC took all the available time in the deadline before procrastinating. But this is not the norm, it is not a first in, first out process, it’s a parallel process for various filings (Gary recently stated they are looking at 8/10 of them) that ends when the paperwork is ready, even before the deadline.
Every decision at the SEC is taken when they are ready, before the deadline.
This is how it works on every other product.

each application has different submission dates and deadline dates.. so you cannot assume that companies will sue the SEC simply for choosing one first. applicants know they wont all get an answer at the same date normally.. its a queuing system of first in first out. and no, first in does not default to first success.

however IF they all applied on the same date and had a deadline response of the same date. then you might have atleast a foot in the door point where some applicants can sue if they are rejected(for dodgy/absent sec reason) even if their offering sounds the same as the successful applicant

but it still requires the SEC to give dodgy/absent reason to reject others with same deadline, same offering. however if the SEC gives good reason to reject majority or each one didnt have same offerings, meaning they missed certain sec demands/requirements. SEC can reject them and it sucks to be the loser. the loser just need to take the advice tweak the application and submit again

I respectfully disagree with this one.
Once again, for the exact reason you just stated, the first-mover advantage is so relevant that anyone excluded from such an advantage will sue the SEC  so quickly and for so much money that they will obliterate it in any court.
I'm sorry, but I can't imagine Gary letting the agency go through this yet another time only to lose another time (embarrassing his sponsors in DC).