Grayscale: Why Converting GBTC To An ETF As Necessary? Submit Your Support Here

May 11 2022

Online

Grayscale

Many cryptocurrency enthusiasts and investors do not have an idea about what GBTC is. To make things clear, GBTC or the Grayscale Bitcoin Trust is a digital currency investment product that allows investors to buy and sell in their brokerage accounts. It is an investment vehicle that can be traded over the counter and is available to buy and sell similarly to any U.S. security. Grayscale has always been one of the biggest proponents of a spot Bitcoin ETF and has threatened to sue the SEC over the issue.

Origins of the Grayscale Bitcoin

Trust

The Grayscale® Bitcoin Trust (OTCQX: GBTC) was first launched in 2013. It received a public quotation within two years of its opening and became an SEC reporting company in 2020. GBTC has become the first crypto SEC reporting investment vehicle, holding approximately 3.5% of BTC in circulation. Over the years, the team behind Grayscale has taken several steps to make it into the world’s largest and most transparent BTC investment vehicle. They have also taken steps to partner with regulators and policymakers to build trust in the Bitcoin ecosystem.

Filing to Convert GBTC into an ETF

Grayscale has long been committed to converting GBTC as well as 14 other Grayscale investment products into ETFs. This is the reason why they have partnered with NYSE Arca. To convert GBTC into a Bitcoin Spot ETF, NYSE Arca has filed Form 19b-4 with the Securities and Exchange Commission. The move was triggered after the SEC allowed Teucrium to issue a bitcoin futures exchange-traded product. Should the move go through, current holders of publicly-traded shares of GBTC do not have to do anything as they will automatically be converted into shares of the ETF.

Why is it essential for investors to convert GBTC into an ETF?

From the point of view of investors, the SEC is doing more harm to them by not approving the conversion. The decision comes into question especially considering that the SEC approved futures-backed Bitcoin ETF last October, but continues to reject applications for spot Bitcoin ETFs.

This defies logic, as both GBTC, as well as futures-backed Bitcoin ETFs, provide exposure to the same underlying asset, Bitcoin. By not accepting this application, the SEC is denying the rights of investors to choose between direct or futures-based exposure to that asset.

Furthermore, one of the biggest issues is the discount to NAV in GBTC, which has been around 25% on average. This results in the price of GBTC being less than the price of Bitcoin, the asset itself. This results in a $7.5 billion destruction of value for GBTC shareholders, considering that GBTC has about $30 billion in AUM.

Investors can voice their opinions in favour of converting BGTC into an ETF by using the following link: Grayscale

About Grayscale Bitcoin Trust

Grayscale Bitcoin Trust is a financial vehicle that allows investors to trade shares in trusts that hold large pools of BTC.

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May 11 2022
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Date
May 11 2022
Expired!