Grayscale – the world’s largest Bitcoinfund – reportedly met privately with the Securities and Exchange Commission (SEC) last week. The company argued that the commission should approve its transition to a bitcoin spot ETF to unlock over $8 billion in value for its investors.
Why Convert Greyscale?
In a presentation shared with CNBC, Grayscale claimed that a bitcoin spot ETF would be “no riskier than a bitcoin futures ETF.” The Company believes that both spot and futures markets are influenced by the same inputs due to their significant overlap in constituents and closely correlated prices.
Grayscale currently holds over 640,000 Bitcoin on behalf of over 850,000 US accounts. That’s about 3.4% of Bitcoin’s total supply, which was worth $18.6 billion at the time of writing.
The fund acts as a route for companies like Cathie Woods Ark Invest to gain price exposure to Bitcoin. However, the fund’s specifications differ from those of exchange-traded funds, resulting in the price of Bitcoin being tracked less accurately.
Right now, Grayscale’s actual trust – GBTC – is trading at a 25% discount to its underlying bitcoin holdings. The company argues that this discount disappears when converted to an ETF, bringing immense value to current investors.
Fight against the SEC
Grayscale’s campaign to convert its fund was long and tedious. Unlike comparable bodies in other countries, the SEC has been extremely reluctant to issue a Bitcoin– Spot ETF to approve.
However, Grayscale refuses to give in to its ambitions and continues to pressure the commission to approve the conversion of spot ETFs. It has already encouraged its investors to send over 3,000 letters to the SEC in support of its filing, even threatening to sue them if they don’t.
As CEO Michael Sonnenshein claims, the commission failed to give equal treatment to two similar products between futures ETFs and spot ETFs. Therefore, if the Commission denies Grayscale’s application, it could be held liable for a breach of the Administrative Procedures Act.
Source: Crypto News Deutsch