Grayscale, a leading company in the crypto asset management sector, has made significant statements about the potential conversion of its Grayscale Bitcoin Trust (GBTC) product into a Bitcoin ETF fund. This move could eliminate the current 8.09% discount between the approximately $1.89 billion market value and the price of Bitcoin, possibly bringing GBTC’s price closer to the true value of Bitcoin and providing significant benefits for investors.
Grayscale’s ETF Announcement
Grayscale’s chief legal officer Craig Salm and chief financial officer Edward McGee made statements regarding the issue. The GBTC, which is awaiting approval from the United States Securities and Exchange Commission (SEC), will transition from the current OTCQX service platform to the NYSE Arca exchange if approved.
This step aims to better synchronize GBTC shares with the real Bitcoin price and provide investors with an easier mechanism for effortless share transactions or service use.
ETF analyst Eric Balchunas from Bloomberg commented on the reliance on the relaxation of Regulation M (Reg M). The expert referred to past discussions suggesting that the SEC could use Reg M to block or delay certain legal procedures but avoided confirming this. Balchunas pointed out Grayscale’s handling of the Regulation M process immediately after their meeting with the SEC, highlighting the potential significance or impact this might have in the negotiations.
What Could Happen with ETF Approval?
In an environment where Bitcoin was trading at $39,684 at the time of writing and an increase in trading volume indicated growing investor interest, spot Bitcoin ETF products would offer investors a more accurate representation of Bitcoin’s value through GBTC, and create a safer route for institutional investors to move towards Bitcoin. This development has already led to a 3% increase in Bitcoin’s value in the last 24 hours, with a notable increase in trading volume continuing.
Bloomberg ETF analyst James Seyffart announced in a post shared on November 28 that the SEC delayed its decision on applications 34 days ahead of the final decision date of January 1, 2024. Seyffart and his colleague Eric Balchunas had given a 90% chance of Bitcoin ETF applications being approved by January 10, 2024, and commented on the delays:
“This likely confirms the move to potentially line up every applicant for approval by the January 10, 2024 deadline.”
