Grayscale, a leading digital asset management firm, is optimistic about the prospect of converting its Grayscale Bitcoin Trust (GBTC) into a Bitcoin Exchange-Traded Fund (ETF). This transformation could address the current 8.09% discount on GBTC, which represents approximately $1.89 billion, thereby aligning GBTC’s price more closely with the actual value of Bitcoin. Such a change would be advantageous for investors, offering a more accurate reflection of Bitcoin’s value and a safer investment channel for institutional participants.
Craig Salm, Grayscale’s Chief Legal Officer, and Edward McGee, the Chief Financial Officer, have shared insights into this potential transition. Awaiting the green light from the United States Securities Exchange Commission (SEC), Grayscale plans to shift GBTC from its present platform, OTCQX, to the more prestigious NYSE Arca exchange. This move is aimed at better mirroring the actual price of Bitcoin and facilitating a more efficient process for investors to create or redeem shares.
Eric Balchunas, an ETF analyst at Bloomberg, highlighted the critical role of Regulation M (Reg M) relief in this context. He recalled past discussions indicating that the SEC might leverage Reg M to delay or obstruct certain processes, although he stopped short of confirming this. The mention of Regulation M right after Grayscale’s meeting with the SEC suggests its potential relevance in the ongoing discussions.
With Bitcoin’s price currently at $39,481 and a noticeable increase in trading volume signaling heightened interest from traders, the introduction of a spot Bitcoin ETF would provide investors with a more accurate representation of Bitcoin’s value via GBTC. This shift has already contributed to a 3% rise in Bitcoin’s value over the last 24 hours, along with a significant spike in trading volume, reflecting broad market interest.
In a recent post on X (formerly Twitter), Bloomberg ETF analyst James Seyffart noted that the SEC postponed its decision on the applications 34 days earlier than the January 1, 2024, deadline. Seyffart, along with his colleague Eric Balchunas, had previously estimated a 90% chance of spot Bitcoin ETF approvals by January 10, 2024. The recent twin delays, according to Seyffart, almost certainly indicate that the SEC is aligning all applicants for potential approval by the January 2024 deadline.
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