Grayscale announces plans to convert the GBTC fund into a Bitcoin ETF according to the recent SEC filing that we read more about in our latest BTC news.
The world’s biggest cryptocurrency asset manager Grayscale announces plans to convert the GBTC trust into a Bitcoin ETF with the company even filing documents with the US Securities and Exchange Commission which indicated that it completed all steps before a transition occurs. Launched in 2013, Grayscale is a digital asset manager that enables institutional and accredited investors to receive exposure to BTC and other cryptocurrencies without having to worry about managing the holdings and storing them.
The company enjoyed the past year with a strong increase of its assets under management which is above $45 billion. Grayscale ended 2019 with $2 billion just for reference. The first launched product was the Grayscale Bitcoin Trust which accounts for the majority of the company’s holdings with about $39 billion. The company has more plans for another trust according to the filing with the SEC. Grayscale asserted:
“first and foremost we wish to make clear: we are 100% committed to converting GBTC into an ETF.”
The asset manager explained its intentions from the start was to complete a transition into an ETF and made the last step a few years ago when GBTC became an SEC-reporting product. The company also outlined a huge uptick in demand from its clients and other potential customers inquiring whether or not the company will introduce a BTC ETF. The company made an attempt a few years ago but the SEC rejected it. The filing concluded:
“The timing for converting GBTC to an ETF will be driven by the regulatory environment.”
As we reported a while ago, GBTC has traded at a high premium relative to the underlying cryptocurrency with an average of 15.02% premium since the fund’s inception. As competition grows and companies are looking for cheaper and accurate financial products, GBTC’s appeal dropped to an all-time low. Back in 2020 when BTC prices doubled, investors wanted to pay a huge premium to gain more exposure to the major cryptocurrency. This resulted in an increase in inflows and led to the number of GBTC shares skyrocketing to 692 million at the time. However, the fund doesn’t allow redemptions or conversions which means that the shares can only be created and never destroyed.
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