The world’s largest digital asset management company Grayscale Investments has announced that it is “100% committed” to transforming its flagship product, the GBTC Bitcoin Trust, into an Exchange Traded Fund (ETF).
1/ In recent months there’s been a growing number of questions around the possibility of a $ BTC ETF in the US. Today we published a blog post to provide clarity and context on what such a development would mean at Grayscale and for $ GBTChttps://t.co/3ZWACq1jvw
— Grayscale (@Grayscale) April 5, 2021
The company notes that the timing of the process will depend on the decision of the regulators. To date, no Bitcoin ETF has been approved in the United States, but several such applications have been filed recently. Industry participants hope that the Securities and Exchange Commission (SEC) will change its attitude towards this issue with the arrival of the new administration.
Grayscale also claims to be the first in the US to launch a public Bitcoin fund and the only one to announce its intention to convert it to an ETF. In addition, there are only two SEC-accountable funds in the cryptocurrency industry, both of which are owned by Grayscale. “Once the GBTC is converted into an ETF, there will be no action by the shareholders of the publicly traded trust and the management fees will be reduced,” the firm said.
GBTC shares have been trading below the corresponding share of bitcoin for more than a month. While there have been similar periods in the past, the depth and duration of the current decline remains unprecedented. Market participants admit that now may be a good time to buy them given Grayscale’s plans. It is assumed that if the fund turns into an ETF, the company will offer investors the opportunity to convert securities back into bitcoins. The current structure of the fund does not provide for a mechanism for withdrawing the cryptocurrency in it. According to the latest reports from April 2, GBTC has assets of $ 38.8 billion.
As Messari founder Ryan Selkis notes, by converting the trust into an ETF, Grayscale will be forced to waive at least $ 250 million in commissions per year. At the same time, there is a massive expectation that the approval of a Bitcoin ETF will render Grayscale in its current form irrelevant.
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