Alternative Investments/Digital: Grayscale Trains Its Sights On Morphing GBTC Into An ETF
In a blog, Grayscale said it would re-apply to the SEC for a bitcoin ETF.
In a blog post today, Grayscale cleared the air on its intentions regarding a bitcoin ETF, given the increasing number of applications piling up with the SEC for permission to launch such a vehicle for the leading cryptocurrency. (Grayscale)
“First and foremost we wish to make clear: we are 100% committed to converting GBTC into an ETF,” wrote Grayscale.
GBTC is the symbol for the Grayscale Bitcoin Trust, the first publicly traded-bitcoin fund in the U.S. and the first and only bitcoin fund to convert into an SEC-reporting company. GBTC is the flagship fund of Grayscale, which is the world’s largest digital asset manager. It currently has assets of $38.8 billion and charges an annual fee of 2%.
Converting GBTC to an ETF
If Grayscale obtains the SEC’s go-ahead for a bitcoin ETF, the most favorable impact for GBTC holders, who would be migrated to the publicly traded units of the ETF, would be a reduction in the above annual fee.
“Today, we remain committed to converting GBTC into an ETF although the timing will be driven by the regulatory environment,” Grayscale stressed. “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.”
Is second time lucky?
Grayscale previously applied to the SEC for a bitcoin ETF in 2016 but then withdrew that application because it felt “the regulatory environment for digital assets had not advanced to the point where such a product could successfully be brought to market.”
In recent years the SEC has determinedly rejected all applications for a bitcoin ETF. Current hopefuls that have applications pending include VanEck, Fidelity, Skybridge Capital, Bitwise, and the New York Digital Investment Group (NYDIG).
On March 15, the SEC published the bitcoin ETF application received from VanEck. That started a 45-day period within which the SEC must accept or deny the application. However, it may also decide to extend its review by up to 240 days.
On the other hand, Canada has stolen a march and already approved three bitcoin ETFs during the months of February and March.
Meanwhile, Grayscale says of its chances with the regulator: “We are confident in our current positioning and engagement with the SEC.”
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