Renowned digital asset manager Grayscale is thinking of making a big adjustment to its Grayscale Bitcoin Trust (GBTC) with the goal of turning it into an ETF for Bitcoin.
Investors stand to gain significantly from this strategic action, which aims to rectify the present 8.09% discount of almost $1.89 billion and raise the price of GBTC closer to the real worth of Bitcoin.
Chief Financial Officer Edward McGee and Chief Legal Officer Craig Salm of Grayscale revealed the specifics of this possible change. The transition from OTCQX to the esteemed NYSE Arca exchange is imminent for GBTC, subject to SEC clearance. Improved share synchronization with the current Bitcoin price and a more streamlined process for investors to issue and redeem GBTC shares are the primary goals.
Bloomberg’s ETF analyst Eric Balchunas brought attention to the heavy dependence on Reg M (Reg M) relief in this particular situation. Although Balchunas did not directly state that the SEC used Reg M to hinder or delay particular procedures, he did point out that the intriguing timing of bringing up Regulation M so soon after Grayscale’s meeting with the SEC suggests it may have played a significant role in their discussions.
The SEC postponed its decision on the applications 34 days before the Jan. 1, 2024, decision date, according to a recent post by Bloomberg ETF analyst James Seyffart on X (previously Twitter). The simultaneous delays “all but confirm for me that this was likely a move to line up every applicant for potential approval by the Jan 10, 2024 deadline,” Seyffart remarked, adding that he and his colleague Eric Balchunas had assigned a 90% likelihood to spot Bitcoin ETF licenses by that date.
Investors stand to receive a more precise picture of Bitcoin’s worth if GBTC’s proposed spot Bitcoin ETF materializes, especially considering the cryptocurrency’s present price of $39,481 and the increasing trading volume that indicates heightened trader interest. Additionally, this step creates a more secure channel for institutional investors to interact with Bitcoin.
In the past 24 hours, the value of Bitcoin has surged by 3% due to the anticipated of a spot Bitcoin ETF. Trading volume has also increased significantly, suggesting that there is widespread interest in this development.