Grayscale Files for New ETF Approvals with SEC
Grayscale, a leading firm in digital asset management, has submitted multiple documents to the U.S. Securities and Exchange Commission (SEC) seeking approval for exchange-traded funds (ETFs) that would track Bitcoin Cash, Litecoin, and Hedera. The submissions include S-1 and S-3 forms, among other pertinent paperwork. Through this initiative, Grayscale aims to transform its existing closed-end trusts for these cryptocurrencies into ETFs, which are expected to be listed primarily on NYSE Arca or Nasdaq. Notably, this is not Grayscale’s first attempt at such an endeavor; in 2024, the firm successfully converted its Bitcoin and Ethereum trusts into exchange-traded products.
Growing Trend of Altcoin ETF Applications
In relation to Grayscale’s recent ETF filings for Litecoin, the S-3 document highlights that the prospectus is contingent on the SEC either approving the 19b-4 application or establishing general listing guidelines to ensure that the Trust’s shares are included among those on NYSE Arca. This move aligns with a broader trend where various cryptocurrency firms are seeking SEC approval for ETFs related to altcoins, including popular tokens like Dogecoin and XRP. On the same day, reliable sources reported that the SEC had postponed its decision regarding Bitwise’s spot Dogecoin ETF as well as Grayscale’s spot Hedera ETF.
Performance of Grayscale’s Bitcoin Cash Trust
Grayscale’s Bitcoin Cash trust has shown remarkable performance, with the latest filings indicating a net asset value that surpassed $202 million as of June 30, with shares trading at $4.31 each. It is essential to distinguish between a closed-end trust and an ETF; while a closed-end trust can trade at values above or below its net asset value, an ETF adjusts its buying and selling of assets based on market demand. Moreover, ETFs maintain an open-end structure that allows for the creation and redemption of shares to keep prices aligned with the net asset value.
Grayscale’s Legal Battle with SEC
Previously, Grayscale initiated legal action against the SEC after its proposal to convert its trust was rejected. This legal challenge may significantly influence the commission’s forthcoming decisions regarding the approval of Bitcoin and Ethereum ETFs for trading in the U.S. According to reliable data, spot Bitcoin ETFs have achieved record trading volumes exceeding 1.2 trillion since their launch in the U.S. in January 2024.
SEC Delays Bitwise’s Dogecoin ETF Approval
Reports indicate that REX Shares and Osprey Funds were preparing to launch their Dogecoin ETF this week. However, on September 9, the SEC chose to delay its decision regarding Bitwise’s Dogecoin ETF. In its filing, the SEC stated that the postponement was necessary to allow additional time to assess whether to authorize a proposed rule change that would enable Bitwise to list a meme coin as an ETF. It’s also important to note that Bitwise’s proposed DOGE fund had faced delays in June.
Upcoming Launch of REX Shares and Osprey Funds’ Dogecoin ETF
In contrast, REX Shares and Osprey Funds’ Dogecoin ETF is set to begin trading on September 11, having opted for a different strategy for its listing. Analyst Eric Balchunas commented on the situation via an X post, noting that the upcoming DOGE launch marks the dawn of meme coin ETFs, albeit under the 40 Act. He also predicted that this could be the first U.S. ETF to include an asset that lacks practical utility.
