Grayscale Plans Shift of Bitcoin Trust to Bitcoin ETF for Closer Asset Value Alignment
Summary:
Grayscale, a key digital asset management firm, seeks to convert its Grayscale Bitcoin Trust (GBTC) into a Bitcoin Exchange-Traded Fund (ETF). If approved by the US Securities Exchange Commission, the move could reduce GBTC's current 8.09% discount and align its price closer to the actual Bitcoin's value. The transformation also involves shifting GBTC from the existing OTCQX platform to NYSE Arca exchange. This move aims to synchronize GBTC's shares with the real Bitcoin price and simplify share creation or redemption for investors.
In the digital asset sector, Grayscale's intention to convert its Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF is causing a stir. The proposed transformation could potentially eliminate the current disparity of approximately $1.89 billion or 8.09% between GBTC's price and Bitcoin’s actual value, thereby benefiting investors. The company's top legal person, Craig Salm, and the finance head, Edward McGee, provided this insight. Subject to the US Securities Exchange Commission's green light, a switch from the prevailing OTCQX platform to the prestigious NYSE Arca exchange is on the cards for GBTC. The proposed transition aims to align GBTC's shares with the actual Bitcoin price and facilitate a more effortless creation or redemption of shares for investors. Bloomberg’s ETF analyst, Eric Balchunas highlighted the salient reliance on Regulation M (Reg M) relief. Past considerations indicate that the SEC could potentially leverage Reg M to delay or obstruct certain steps, though Balchunas refrained from confirming this. He pointed out that mentioning Regulation M right after Grayscale's SEC meeting could signify its likely impact or relevance in their discussions. Related: SEC requests public input on Ether spot ETF application by FidelityWith Bitcoin (BTC) standing at $39,481 and the surge in trade volume points to increased traders' interest, the prospect of a spot Bitcoin ETF could achieve a more accurate representation of Bitcoin's value via GBTC, besides providing a safer pathway for big investors to participate in Bitcoin. Already, Bitcoin's value has surged by 3% in the past day, with remarkable trading volume spike reflecting extensive interest.In a post from Nov. 28 on X (formerly Twitter), Bloomberg ETF analyst James Seyffart mentioned the SEC had postponed its decision on the applications 34 days prior to the deadline of Jan. 1, 2024. Seyffart and his colleague Eric Balchunas had given a 90% probability for spot Bitcoin ETF approvals by Jan. 10, 2024. Seyffart stated that the double delays have almost convinced him that these were steps taken to brace every applicant for potential approval by the deadline of Jan. 10, 2024.Magazine: Gracy Chen, a Bitcoin ETF optimist and a skeptic about Worldcoin: The Hall of Flame
Published At
12/3/2023 9:11:08 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.