Thursday, December 9

Follow the plan to convert the largest bitcoin fund into ETFs

Key facts:
  • If the SEC confirms your comfort with bitcoin, it will be requested to convert GBTC to ETF.

  • Grayscale announced that three new funds are now available on the OTC markets.

Grayscale Investments will submit an application to the United States Securities and Exchange Commission (SEC) to convert Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). This company is the largest digital asset manager in the world.

Today, October 18, 2021, Jennifer Rosenthal, Grayscale’s Communications Director, declared on Twitter that the company will make the request once the SEC gives clear formal directions. He notes that they are awaiting “official and verifiable evidence of the SEC’s comfort with the underlying bitcoin market.”

Rosenthal reported that, Once they have this green light, the New York Stock Exchange (NYSE) will file Document 19b-4 to convert GBTC into an ETF. If applicable, the SEC would have 75 days from then on to review the application and render its final verdict.

GBTC is the world’s largest bitcoin (BTC) fund. This means that, if the proposal is approved, the recognition of this cryptocurrency as an investment asset would be greatly expanded. At this time, one unit of GBTC is quoting to $ 45.50, a figure that has increased almost 350% in the last year, following the price changes of bitcoin.

The price of GBTC tracks the variation of bitcoin, its underlying asset, over the years. Source: Greyscale.

Grayscale Investments wants to convert all its projects into ETFs

The company ad today, too, that three of its trusts are now available on the OTC (over the counter) markets. These are Grayscale Zcash Trust (ZCSH), Grayscale Stellar Lumens Trust (GXLM), and Grayscale Horizen Trust (HZEN). Also, according to reported CoinDesk, the company seeks to be funds under the regulation of the SEC.

This measure is part of the intention already announced by the company to convert all its private placement vehicles into ETFs. Grayscale currently has two trusts that are under the control of the SEC (bitcoin and ethereum) and nine publicly traded products.

As for the bitcoin ETF, which has been in the pipeline for a long time, it would be backed by real units of the cryptocurrency, in addition to derivative contracts such as futures. As CriptoNoticias reported, Grayscale Investments has been stating the intention to do this repeatedly.

Grayscale’s announcement comes just one day before the first bitcoin-related ETF launches in the United States. This is the ProShares company fund. Unlike Grayscale, this one is based on futures contracts.