The Grayscale BTC trust trades 355 lower than the Bitcoin price and the disparity recovered a little but only because the crypto continued falling so let’s read more today in our latest Bitcoin news.
The shares of the Grayscale Bitcoin Trust were trading at a discount of 35% after the US SEC rejection of its application to transition into a spot market BTC ETF. The circumstances are ironic given the discount was one of the primary arguments why the transition needed to happen. The company held a private meeting with the SEC and it argued that converting the BTC trust to an ETF can unlock $8 billion for investors by simply eliminating the discrepancy.
Back then, the GBTC shares traded at a 25% discount against the company’s BTC which means it was 25% less expensive to purcahse GBTC than the BTC that it represents. A day ago, the discount grew to 35% based on the Grayscale calculator and while its BTC per share stood at $18.62, the marekt price of the share was $13.32 each. In the meantime, the price of BTC continued falling and it is now down to $19,000 after the SEC rejection of the ETF application. This helped the total share value to get closer to parity with the BTC holdings as the value of the latter decreased.
The ETF is a type of investment that provides indirect exposure to an asset like gold without having to own it and store the asset itself. The BTC ETF will allow investors that are uncomfortable to manage the crypto directly and gain exposure to the asset as well as other corporations that could be barred from purhcasing BTC by internal charter. Grayscale is the biggest crypto asset management company and the BTC trust holds up to $12.9 billion in AUM. The Grayscale BTC trust trades 35% lower now while still many investors consider it a less than ideal investment.
Unlike the ETF product, it’s not easy to create or redeem the shares of GBTC in response o the BTC market movement which is why the supply and demand for the shares can vary from the one of BTC at any time and create heavy price discrepancies. The CEO Michael Sonnenshein campaigned to predate the SEC to permit Grayscale’s conversion and the fund’s efforts started right away after the first BTC futures ETF was approved last year which only boosted the confidence that a spot ETF was soon to follow.
The SEC chairman Gary Gensler remained opposed to the sports market BTC ETF and cited market manipulation as well as consumer protection concerns. Grayscale saw it differently and thinks that Gensler and the SEC are being discriminatory against BTC.
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