A major participant in the digital asset management space, Grayscale has voiced excitement on the possibility of turning its Grayscale Bitcoin Trust (GBTC) into a Bitcoin exchange-traded fund.The current 8.09% discount, which is worth over $1.89 billion, might be removed by this action, bringing GBTC’s price more in line with Bitcoin’s true value and providing investors with major gains.Chief finance officer Edward McGee and chief legal officer Craig Salm of the corporation disclosed the information.Subject to US Securities Exchange Commission permission, GBTC plans to move from OTCQX, its existing platform, to the prestigious NYSE Arca exchange.This action aims to establish a more convenient way for investors to create or redeem shares, as well as to better synchronize GBTC’s shares with the actual Bitcoin price.
The significant reliance on Regulation M (Reg M) relief was noted by Bloomberg ETF analyst Eric Balchunas.Although he doesn’t explicitly say so, he makes reference to earlier discussions that seem to indicate the SEC may utilize Reg M to obstruct or delay certain operations.Balchunas draws attention to the curious timing of Grayscale’s meeting with the SEC, immediately following which Regulation M was brought up, suggesting that the SEC may have given it some thought or considered its implications.
Given that Bitcoin is currently trading at $39,481 and that there has been a spike in trading volume, which suggests increased trader interest, the possibility of a spot Bitcoin ETF guarantees investors a more accurate representation of the value of Bitcoin through GBTC and creates a safer channel for institutional investors to interact with Coins.Bitcoin’s value has already increased by 3% as a result of this event in the previous day, and the extraordinary spike in trading activity that has followed indicates that there is broad interest.
James Seyffart, a Bloomberg ETF analyst, stated in a tweet on X (formerly Twitter) on November 28 that the SEC postponed making a decision on the applications for thirty-four days, exceeding the deadline of January 1, 2024.By January 10, 2024, Seyffart and his colleague Eric Balchunas had estimated that there would be 90% chance of spot Bitcoin ETF approvals. The two delays, in Seyffart’s words, “all but confirms for me that this was likely a move to line every applicant for potential approval by the Jan 10, 2024 deadline.”