#What is Grayscale's New Move Towards a Chainlink ETF?
Grayscale is actively working to transform its Chainlink investment vehicle into a spot exchange-traded fund. This measure follows the filing of a Form S-1 with the SEC, aiming to convert the Grayscale Chainlink Trust into the Grayscale Chainlink Trust ETF. The ETF is set to be listed on NYSE Arca under the ticker GLNK.
The potential approval of this ETF hinges on recent proposals from NYSE Arca regarding its generic listing standards for commodity-based exchange-traded products. These standards may eventually allow certain cryptocurrency products to be listed without the need for case-by-case approval from the SEC. Grayscale is optimistic that the current structure of its LINK product would meet these criteria if implemented.
#How Will the Trust Manage LINK Holdings?
Under this proposed structure, the trust intends to hold LINK directly. Coinbase Custody will act as the custodian responsible for safeguarding these digital assets. Additionally, BNY Mellon will take on the role of administrator and transfer agent for the ETF. The shares of the ETF will be issued and redeemed in blocks of 10,000 units, primarily through cash transactions facilitated by third-party liquidity providers. Though in-kind LINK transfers are not currently available, they might be introduced pending regulatory approval.
The filing also suggests the possibility of staking LINK. However, this too is dependent on receiving relevant tax and regulatory approvals.
#What is the Current Market Standing of Chainlink?
At present, Chainlink boasts a market capitalization of approximately $15.6 billion, making it the 13th largest cryptocurrency according to CoinGecko data. Currently, the token is trading around $23, showing an upward movement of nearly 3% for the day.
#Is Grayscale Alone in Pursuing a LINK-Backed ETF?
Grayscale is not the only company interested in creating a LINK-backed ETF. Earlier in August, Bitwise Asset Management also submitted a proposal to the SEC to launch its own version of the Bitwise Chainlink ETF. This indicates a growing interest in Chainlink as a viable asset for ETF investments, reflecting the evolving landscape of cryptocurrency investment options available to retail investors.