- Leading cryptocurrency asset manager Grayscale expresses confidence that the SEC will soon approve the conversion of GBTC into a spot Bitcoin ETF.
- In the ETF format, GBTC shares will closely track the price of Bitcoin, and any premium or discount in GBTC’s share price will disappear.
- When the SEC approves the conversion of GBTC into a spot Bitcoin ETF, GBTC will be registered under the Securities Act of 1933.
Grayscale, the world’s largest digital asset manager, is expecting approval for a spot Bitcoin ETF soon: FAQs answered.
Grayscale Addresses GBTC Questions
Leading cryptocurrency asset manager Grayscale expresses confidence that the SEC will soon approve the conversion of GBTC into a spot Bitcoin ETF. As the approval of a spot Bitcoin ETF in the U.S. by regulatory authorities is now a matter of ‘when’ rather than ‘if,’ Grayscale executives address some questions regarding the listing of GBTC as an ETF.
Grayscale’s Chief Legal Officer Craig Salm and Chief Financial Officer Edward McGee explain what the SEC’s approval of transforming the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF means for investors and market participants.
In the ETF format, GBTC shares will closely track the price of Bitcoin, and any premium or discount in GBTC’s share price will disappear. Currently, GBTC is trading at an 8.09% or $1.89 billion discount. Through the arbitrage mechanism, this will unlock approximately $1.89 billion in value for investors.
“GBTC couldn’t rely on the arbitrage mechanism unique to ETFs. GBTC shares can trade at both a premium and a discount to NAV and have done so.”
A Grayscale spot Bitcoin ETF will allow investors to utilize the arbitrage mechanism, enabling the continuous creation or redemption of shares.
What Happens After the SEC Approves GBTC as a Spot Bitcoin ETF?
When the SEC approves the transformation of GBTC into a spot Bitcoin ETF, GBTC will be registered under the Securities Act of 1933. GBTC share redemptions will be carried out under the Waiting Regulation.
Bloomberg ETF analyst Eric Balchunas remarked, “Dependency on Reg M comfort is noteworthy. I had heard something a while back about a possible park penalty the SEC could use to keep them away from the Gateway. I’m not saying this isn’t evidence, but it’s interesting that they mention it right after the meeting with the SEC.”
GBTC will move from OTCQX to NYSE Arca, attracting investors to the crypto market, significantly boosting BTC’s price. Institutional investors seeking a secure investment in Bitcoin may have the opportunity to trigger widespread adoption.
The BTC price has increased by 3% in the last 24 hours, currently trading at $38,760. The 24-hour low and high values are $38,085 and $38,999, respectively. Also, the increased trading volume in the last 24 hours indicates interest among traders.
