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CNBC Interview with Grayscale: Transitioning Bitcoin spot ETF to lower management fees; Bloomberg Analysis: 75% Approval Rate Expected This Year

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CNBC Interview with Grayscale: Transitioning Bitcoin spot ETF to lower management fees; Bloomberg Analysis: 75% Approval Rate Expected This Year

Following a victorious battle in the lawsuit with the SEC, Grayscale CEO Michael Sonnenshein immediately sat down for an interview with CNBC to discuss the matter. Apart from announcing the next steps to be taken, he also indicated that if the Grayscale Bitcoin Trust (GBTC) successfully transitions, it will lower its management fees.

CNBC Interview with Grayscale CEO: Management Fees Will Decrease Once Transitioned

In the interview, Michael Sonnenshein clearly stated that if GBTC transitions to a Bitcoin spot ETF, its management fees will be reduced, while the current annual management fee for GBTC is 2%.

In a previous report discussing Ethereum futures ETFs, due to the multitude of institutions applying for this product, once multiple ETFs are approved, it may lead to a fee war. It appears that a similar situation could also arise for Bitcoin spot ETFs.

How to Prevent Bitcoin Price Manipulation?

The interviewer raised the question of how to ensure that investors are not affected by Bitcoin price manipulation after the transition. Michael Sonnenshein mentioned "Surveillance-sharing" as a solution.

This mechanism, first proposed by BlackRock during the frenzy of Bitcoin spot ETF applications, has been emulated by several institutions. By signing surveillance-sharing agreements with trading platforms, partners can share information regarding market trading activities, clearing activities, and customer identities, thereby reducing the possibility of market manipulation.

Learn more: BlackRock's Bitcoin spot ETF surveillance-sharing agreement may bring billions to the investment market

Michael Sonnenshein pointed out that both the Chicago Mercantile Exchange, where Bitcoin futures ETFs are traded, and the New York Stock Exchange, where Grayscale aims to list Bitcoin spot ETFs, already have surveillance-sharing in place. He believes this meets the supervision requirements sought by the SEC, applicable to both futures and spot ETFs.

Grayscale's Next Steps

What actions will Grayscale take in this lawsuit moving forward?

As the SEC still has the option to appeal the case within the next 45 days, Michael Sonnenshein stated that Grayscale will patiently wait and follow the federal appeals process regulations. At the same time, they hope to work actively with lawyers to swiftly pursue the next steps, seizing the opportunity to bring GBTC under regulatory oversight.

Bloomberg Analyst: 75% Chance of Bitcoin Spot ETF Approval by Year-End

Following Grayscale's victory in the lawsuit against the SEC, Bloomberg ETF analyst Eric Balchunas raised his prediction of the probability of a Bitcoin spot ETF approval by the end of this year to 75%, and 95% by the end of next year.

He mentioned that the impact of Grayscale's victory was already factored into his previous prediction, resulting in a 65% probability. However, the decisiveness and consistency of this ruling exceeded expectations, leaving the SEC with very limited room for maneuver, thus increasing the probability.

In addition to the legal failure in the courtroom, Eric Balchunas believes this is also a PR failure for the SEC. With extensive coverage in mainstream media, it will change people's perceptions.

"We believe the losses in legal and PR aspects will combine to make it politically unfeasible for the ETF rejection to stand." Eric Balchunas said.