BTC / USD

12 feb 2022

Grayscale Investments LLC - a company that provides services for investing in digital currency.

Almost 3.4% of the total Bitcoin issue is controlled by one company: Grayscale and its Bitcoin Trust (GXT).

Grayscale has plans to convert GBTC shares into deliverable spot Bitcoin ETFs!

In 2013, Grayscale launched GBTC and pioneered the model of providing investors with exposure to digital assets in the form of a security without the challenges of buying, storing, and safekeeping digital assets.

With GBTC, Grayscale became the first company to launch a publicly traded-Bitcoin fund in the U.S. and the first and only to convert a Bitcoin fund into an SEC-reporting company. These were each groundbreaking achievements and brought greater transparency, regulatory clarity, and reporting standards for the investment community. In fact, GBTC today remains one of only two crypto funds in the world with the distinction of being an SEC-reporting company. The other fund is the Grayscale Ethereum Trust (Symbol: ETHE).

Each Grayscale product is at various stages of this lifecycle:
1. Launch Private Placement
2. Obtain Public Quotation on Secondary Market
3. Become SEC Reporting
4. Convert Into ETF

Grayscale has intention always been to convert these products into an ETF when permissible. When GBTC converts to an ETF, shareholders of publicly-traded GBTC shares will not need to take action and the management fee will be reduced accordingly.

GBTC is the largest and most liquid Bitcoin investment product in the world. The size, liquidity, regulatory status, and track record distinguish GBTC from any other products in the world. In fact, compared with global commodity exchange-traded products, GBTC would today rank second with $34 billion in AUM, behind only SPDR Gold Trust (Symbol: GLD) and third with $2.6 billion in weekly volume, behind only GLD and iShares Silver Trust (Symbol: SLV).

Grayscale first submitted an application for a Bitcoin ETF in 2016 and spent the better part of 2017 in conversations with the SEC. Ultimately, this application was withdrawn.

Today Grayscale is locked in a new bitter battle with the U.S. Securities and Exchange Commission over the agency's refusal to approve its application for a spot-market Bitcoin ETF. Grayscale has suggested it may sue over the refusal, which it claims is arbitrary, especially as the SEC has approved a more complicated version of Bitcoin ETFs tied to the derivatives market.

I think that BTC will have a new maximum on the news of the SEC's resolution for Grayscale Bitcoin-ETF. This will be a very tricky move, so at highs above $ 100,000 it will turn out that the owners of their physical Bitcoins will be the holders of GBTC shares.

Based on the latest information, the SEC will make a decision on July 6, 2022.