Grayscale Investments' CLO Confident in U.S. Approval for Spot Bitcoin ETF

Craig Salm, the Chief Legal Officer at Grayscale, recently shared his insights with CNBC Crypto World, focusing on the future of spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) in the U.S.

Progress on Spot Bitcoin ETFs

Salm highlighted significant advancements in the dialogue with the U.S. Securities and Exchange Commission (SEC) regarding the conversion of Grayscale’s Bitcoin and Ethereum trusts into spot ETFs. Following a favorable court ruling, which underscored the inconsistency in the SEC’s approach to Bitcoin futures and spot Bitcoin ETFs, Grayscale has seen constructive engagement with the SEC. The focus is now on the uplisting of Grayscale Bitcoin Trust (GBTC) onto the New York Stock Exchange, a process involving detailed reviews and amendments to meet SEC requirements. Salm expressed confidence in the eventual approval of spot Bitcoin ETFs, considering it a matter of “when” rather than “if.”

Ethereum and Other Crypto Assets

The conversation also touched on Ethereum and other cryptocurrencies. With Ethereum futures now trading on regulated platforms like the CME, Salm sees a parallel path for Ethereum ETFs similar to Bitcoin. Grayscale has filed to convert its Ethereum trust into a spot Ethereum ETF, anticipating regulatory approval in the near future. Salm also hinted at the possibility of ETFs for other cryptocurrencies, like Solana, as the market matures and regulatory frameworks evolve.

Impact of Regulation on Crypto Markets

Salm discussed the broader theme of regulation in the crypto space, viewing the approval of a spot Bitcoin ETF as a positive regulatory step. This move would bring Bitcoin further into the regulatory framework, benefiting the entire crypto industry. He emphasized the need for comprehensive legislation to clarify the classification of digital assets and the regulation of custodians, exchanges, and brokers.

Legislative Developments

Two significant bills have made progress in the U.S. Congress: the Financial Innovation and Technology for the 21st Century Bill (FIT21) and the Clarity for Payment Stablecoins Act. The FIT21 bill focuses on digital asset market structure, while the stablecoin bill addresses a more straightforward and comprehensible aspect of crypto. Salm sees these developments as positive, though he acknowledges the complexity and challenges in passing comprehensive crypto legislation.

Outlook for 2024

Looking ahead to 2024, Salm is closely monitoring the spot ETF matter, the U.S. elections, and ongoing court cases that could bring further regulatory clarity. He remains optimistic about continued engagement from the SEC and the potential for further regulatory developments in the crypto space.

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