Grayscale is ‘operationally ready’ to convert GBTC into ETF if SEC gives approval Grayscale is ‘operationally ready’ to convert GBTC into ETF if SEC gives approval
The SEC had failed to contest a court ruling that directed it to review Grayscale's application for a spot Bitcoin ETF.
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Updated: Oct. 16, 2023 at 8:59 am UTC
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Grayscale said it is “operationally ready” to convert its Bitcoin Trust (GBTC) into an exchange-traded fund (ETF) immediately after the US Securities and Exchange Commission (SEC) approves its application.
The crypto asset manager made this statement in response to the SEC’s failure to appeal a court ruling compelling it to review Grayscale’s conversion request.
According to Grayscale, following the exhaustion of the 45-day appeal window, the court will issue its final mandate within the next seven days, and its “team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval.”
Fox Business journalist Eleanor Terrett first shared the statement.
GBTC is the most significant investment vehicle for the flagship asset. Grayscale had sued the SEC’s blockage of creating a spot bitcoin ETF, arguing that this would benefit investors and allow redemptions for its trust.
GBTC shares trade at a significant discount to its net asset value because it does not allow investors to redeem their shares. Data from Coinglass shows that the GBTC discount has narrowed to a yearly low of 15.88% as of Oct. 13.
Analysts believe the discount would close if the trust is converted into a spot Bitcoin ETF, as it would expose investors to the flagship digital asset without needing to own it directly.
In its defense, the financial regulator regularly claimed that applicants lacked sufficient measures to safeguard investors from market manipulation. The SEC has yet to approve any application for a spot Bitcoin ETF despite the many applications from top investment firms, including BlackRock, the world’s largest asset management firm, during the past decade.
However, market observers believe that the regulator’s stance might be softening, with Bloomberg ETF analysts pegging the possibility of a spot BTC ETF approval at 90% recently. According to the experts, the SEC’s increased communication with a fund sponsor has boosted their confidence that the financial watchdog might be finally ready to cave into the demand.
“This back-and-forth between the SEC and fund sponsors is standard practice for new launches but a first for spot Bitcoin ETF applications,” they wrote.
Bitcoin rose 4% to touch $28,000 early Monday, Oct. 16, as anticipation of the first spot Bitcoin ETF in the US increases.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.