Grayscale’s Bitcoin ETF Dreams On Limbo? CEO Claims To Do This If It Fails

Grasyscale Investments said that if it fails to turn the world’s biggest Bitcoin fund into an exchange traded fund, it will find other ways to return the portions of investors of Grayscale Bitcoin Trust.

Grayscale Bitcoin Trust also as GBTC has widened its discounts rate eventually following the turmoil in the market this year. GBTC, on Friday, was trading at a 49% discounted rate compared to the price of Bitcoin, according to a report. GBTC does its trading as a close-end fund, it offers premium and discounted offers on trading. The annual fees for the fund is 2%.

Michael Sonnenshein, Chief Executive of Grayscale, said in a letter that

“These options could include a tender offer for up to 20% of the outstanding shares of the $10.7 billion trust,”

as per a report by The Wall Street Journal.

Also read: Crypto Selloff: Why Grayscale May Be Next In Line After FTX Crash?

What does the Grayscale letter aims at?

The letter from Sonnenshein aims to deal with the worries of GBTC investors following the bankruptcy of the cryptocurrency exchange FTX. The crash of the leadeing exchange had shook the entire cryptoverse. Among those affected by the FTX collapse include Grayscale’s parent company, Digital Currency Group, and cryptocurrency lender Genesis Global. Genesis halted loan originations and redemptions after it was unable to satisfy client withdrawal requests, and DCG claimed Genesis is owed over $1.7 billion through two loans.

Until now, the Securities and Exchange Commission has rejected spot bitcoin ETF applications. It claims that these products are susceptible to fraud and market manipulation. Only ETFs tracking bitcoin futures were permitted to enter the market by the SEC.

According to Grayscale, making GBTC an ETF would assist its share price trade in line. To make sure that the shares of GBTC reflect the true worth of the bitcoins it has, market players would be able to issue and redeem shares.