Grayscale, a significant player in the digital asset management sector, has expressed enthusiasm about the possibility of converting the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF. This move could eliminate the current discount of 8.09%, roughly equivalent to $1.89 billion, and bring GBTC’s price closer to the spot price of Bitcoin, providing significant benefits to investors.
The company’s Chief Legal Officer, Craig Salm, and Chief Financial Officer, Edward McGee, revealed details of the plan. Pending approval from the U.S. Securities and Exchange Commission (SEC), GBTC will transition from its current OTCQX platform to the NYSE Arca exchange. This action aims to better align GBTC’s shares with the price of Bitcoin and introduce a more efficient mechanism for investors to buy or exit the shares.
Notably, ETF analyst Eric Balchunas from Bloomberg has observed a significant reliance on Regulation M (Reg M). He mentioned prior discussions that indicated the SEC might use Reg M to potentially obstruct or delay specific procedures, though he refrained from confirming this.
Balchunas pointed out that the interesting timing of Regulation M discussions occurred shortly after Grayscale’s meeting with the SEC, hinting at its potential significance or influence in their discussions.
With Bitcoin currently priced at $40,490 and a surge in trading volume indicating heightened trader interest, the prospects of a Bitcoin ETF spot assure investors a more accurate representation of Bitcoin’s value through GBTC and establish a safer path for institutional investors to engage with Bitcoin. This development has caused a 3% increase in Bitcoin’s value over the past 24 hours, along with a significant uptick in trading volume, signaling widespread interest.
In a November 28th post on Twitter, Bloomberg ETF analyst James Seyffart revealed that the SEC had delayed its decision on early registrations by 34 days, moving the decision deadline to January 1, 2024. Seyffart and his colleague Eric Balchunas have placed a 90% odds on the approval of a Bitcoin ETF spot before January 10, 2024.