Grayscale applied to the SEC for the listing of BCH, HBAR, and LTC ETFs, expanding the landscape of encryption in the United States.

The cryptocurrency asset management giant Grayscale has submitted multiple regulatory documents to the U.S. Securities and Exchange Commission (SEC), planning to convert its Bitcoin Cash (BCH), Hedera (HBAR), and Litecoin (LTC) trusts into Spot ETFs. If approved, this will further expand the landscape of cryptocurrency ETFs in the United States.

Application Details: Conversion from Closed-End Trust to ETF

According to the S-1, S-3, and related documents submitted by Grayscale on September 10, the company plans to convert its existing closed-end trusts for BCH, HBAR, and LTC into an open-end ETF and list it on the New York Stock Exchange Arca or Nasdaq.

This process is similar to Grayscale's successful conversion of Bitcoin and Ethereum trusts into ETFs in 2024.

Involves Assets and Scale

As of June 30, Grayscale's Bitcoin Cash Trust (BCH Trust) has a net asset value of over $202 million, with a net asset value per share of approximately $4.31.

The scale of the Hedera and Litecoin trust has not been disclosed, but as mainstream encryption assets, their ETF conversion is expected to attract inflows from institutional and retail investors.

Differences Between ETF and Closed-End Trust

The trading price of a closed-end trust may be higher or lower than the net asset value (NAV), while ETFs adopt an open structure that allows for the creation and redemption of shares to keep the market price close to the net asset value, enhancing liquidity and price transparency.

Grayscale once filed a lawsuit against the SEC due to its rejection of the trust conversion application, ultimately leading to the approval of Bitcoin and Ethereum Spot ETFs in the United States.

Regulatory Background and Market Trends

Currently, the SEC is reviewing multiple encryption asset ETF applications, covering a variety of altcoins from Dogecoin (DOGE) to Ripple (XRP).

It is worth noting that the SEC has recently delayed the approval of the Grayscale Spot Hedera ETF and the Bitwise Spot Dogecoin ETF, indicating that the regulatory body is taking a cautious approach towards new types of encryption ETFs.

According to data from The Block, since the launch of the US Spot Bitcoin ETF in January 2024, the cumulative trading volume has exceeded $1.2 trillion, demonstrating that the market demand for encryption ETFs remains strong.

Potential Impact: Expanding the Encryption ETF Ecosystem

If BCH, HBAR, and LTC ETFs are approved, it will further enrich the lineup of cryptocurrency ETFs in the United States and may attract more traditional investors to participate in the altcoin market.

Analysts believe that this will promote the compliance and mainstreaming of encryption assets, while intensifying competition among ETF issuers.

Conclusion

Grayscale is simultaneously advancing the application for three altcoin ETFs, demonstrating its active positioning in the cryptocurrency ETF market. As the SEC approval process progresses, whether BCH, HBAR, and LTC can become the next batch of approved spot cryptocurrency ETFs will become the focus of market attention.