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.

article-image

Michael Sonnenshein, CEO of Grayscale

share

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. 

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screen Shot 2024-05-16 at 14.53.45.png

Research

Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. This report dives into the world of LVR. We uncover its importance for AMM designers, discuss the two major mechanism design categories and various projects developing solutions, and offer a higher level perspective on the importance of AMMs in general.

article-image

Yesterday saw Congress’ upper chamber side with the House on a measure aimed at overturning SAB 121

article-image

Oklahoma’s new crypto bill will go into effect in November of this year

article-image

The deposits hit a $20 million cap in just 45 minutes

article-image

Twelve Democratic Senators voted in favor to pass the resolution Thursday

article-image

Pump.fun is “aware” that bonding curve contracts on Pump.fun were exploited, and has since paused trading

article-image

Some investment pros are mulling crypto allocations between 1% and 10% and seeking ex-BTC exposure for interested clients