Grayscale Still 'Commited' To Converting Its Bitcoin Trust into ETF
Major US-based crypto investments company Grayscale Investments said they're "100% committed" to converting their Grayscale Bitcoin Trust into an exchange-traded fund (ETF). However, according to them, the timing will be driven by the regulatory environment.
"Each Grayscale product is at various stages of this lifecycle and our intention has always been to convert these products into an ETF when permissible," they said, adding that they're confident in their current positioning and engagement with the US Securities and Exchange Commission (SEC).
Per the company, now only GBTC and Grayscale Ethereum Trust (ETHE) are currently SEC-reporting companies, meaning that both these trust are closest to becoming an ETF.
The investment giant said that they withdrew their earlier Bitcoin ETF application, submitted in 2016, because "the regulatory environment for digital assets had not advanced to the point where such a product could successfully be brought to market."
Meanwhile, last month, the company had at least nine ETF-related positions to LinkedIn, signaling it is anticipating a green light from the SEC for a crypto ETF. "It signifies, one, that they are planning to file for an ETF and that they hope the approval process would be potentially quick and thus don’t want to miss out on hitting the ground running," Todd Rosenbluth, Director of ETF research for CFRA Research, told Bloomberg back then.
According to the company, 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, which is now closed for investments, has USD 38.8bn in assets under management. ETHE (also closed) - USD 6.4bn.
While other trusts, such as Bitwise, BlockFi, Osprey Bitcoin Trust, and Canadian Bitcoin ETFs are emerging, the Grayscale trusts have so far been a dominant way for institutional investors to enter the cryptoverse.
The trusts are structured to hold the underlying crypto, while the value of each share is dependent on the amount of crypto under management. They also provide a familiar structure for accounting and taxation. However, there is no way to redeem the underlying crypto.
Meanwhile, many believe that approval of a Bitcoin ETF in the United States would be a watershed moment for BTC adoption. Multiple surveys have indicated that financial advisors in the US would be keen to put their clients' money into BTC ETFs. Moreover, the time is now nigh for the SEC, particularly as crypto ETFs have become almost commonplace north of the border in Canada – as well as Europe.
At 13:24 UTC, BTC trades at USD 57,965 and is almost unchanged in a day. The price increased by 4% in a week and 18% in a month.
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(Updated at 13:26 UTC: updates throughout the entire text. Updated at 14:05 UTC with a paragraph about job postings.)