Grayscale, the largest digital asset manager in the world, is waiting for the U.S. Securities and Exchange Commission (SEC) to announce its decision on whether it will allow the conversion of its Bitcoin Trust (GBTC) into a Bitcoin spot exchange-traded fund (ETF).
Time is Running Out for the SEC
Until today, Oct. 13, 2023, the SEC has to approve, deny, or delay Grayscale’s application, which was filed in April 2023. According to a Fox Business journalist, if the SEC fails to make a decision by the deadline, Grayscale’s legal team can start working with the SEC staff to get the approval process rolling.
🚨NEW: The @SECGov has until midnight tonight to appeal the @Grayscale decision. If they don’t, then in seven days from now the case will be closed and Grayscale can start working with SEC staff to get the process of approval rolling.
Note: Grayscale would work with two SEC…
— Eleanor Terrett (@EleanorTerrett) October 13, 2023
Grayscale’s GBTC is currently the largest publicly traded Bitcoin investment product, with over $30 billion in assets under management. However, GBTC trades at a discount to its net asset value (NAV), meaning that investors can buy shares for less than the value of the underlying Bitcoin.
A conversion to a Bitcoin spot ETF would eliminate this discount and allow investors to buy and sell shares at the market price of Bitcoin. A spot ETF would also have lower fees and more liquidity than GBTC.
Grayscale is not the only company seeking to launch a Bitcoin spot ETF in the U.S. Several other firms, such as Ark Invest, BlackRock, and VanEck, have also filed applications with the SEC. However, Grayscale has an advantage over its competitors, as it already has an existing trust that holds over 650,000 Bitcoins.
The SEC has been reluctant to approve any Bitcoin ETFs, citing concerns over market manipulation, fraud, and investor protection. However, the regulator has recently approved several Bitcoin futures ETFs, which track the price of Bitcoin contracts traded on regulated exchanges.
At the time of writing, Bitcoin is trading around $26,695. This recent decrease in value can be attributed to a combination of factors, including the ongoing geopolitical events in the East.
A Bitcoin spot ETF would be a more direct and efficient way for investors to gain exposure to the leading cryptocurrency. It would also boost the adoption and legitimacy of Bitcoin as an asset class. The crypto community is eagerly anticipating the SEC’s decision on Grayscale’s application, which could have a significant impact on the Bitcoin market.
