Grayscale Files to Convert GBTC to ETF
This is not the first time Grayscale has considered an ETF structure, but the company is hopeful the US Securities and Exchange Commission will view applications more favorably.
Michael Sonnenshein, CEO of Grayscale
key takeaways
- Grayscale plans to convert its popular trust into an ETF, pending regulatory approval
- GBTC was the first publicly-traded bitcoin fund in the US and the only to convert a bitcoin fund into an SEC-reporting company
Digital asset manager Grayscale Investments is “100% committed to converting the Grayscale Bitcoin Trust to an exchange-traded product,” the company announced Monday.
The Trust is currently structured similarly to a closed-end mutual fund. Investors are able to trade shares of GBTC, which are priced close enough to the underlying assets, like any other stock in their brokerage account, but an ETF provides added benefits.
GBTC does not currently trade on a national securities exchange and it does not have simultaneous creation and redemption. An ETF will offer both of these benefits.
“We see this product evolving into an ETF as really just the next step in its lifecycle,” said Michael Sonnenshein, CEO of Grayscale.
GBTC, launched in September 2013, was the first publicly-traded bitcoin fund in the US. The Trust has attracted even the most crypto-weary investors with the chance to safely and quickly gain exposure to the lucrative digital asset market. GBTC currently has $38.8 billion in assets under management, up from $21.1 billion in January 2021.
This is not the first time Grayscale has considered an ETF structure, but the company is hopeful the US Securities and Exchange Commission will view applications more favorably.
“Grayscale first submitted an application for a Bitcoin ETF in 2016 and spent the better part of 2017 in conversations with the SEC,” Grayscale said. “Ultimately, we withdrew our application because we believed the regulatory environment for digital assets had not advanced to the point where such a product could successfully be brought to market.”
The SEC has never approved a digital asset ETF, but that hasn’t stopped firms from trying. This year, Fidelity, Goldman Sachs, SkyBridge Capital, NYDIG and VanEck, among others, have all thrown their hats in the ring.
