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Grayscale plans to convert GBTC into Bitcoin ETF

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Digital asset management company Grayscale Investments plans to apply for the conversion of a Bitcoin trust into an exchange-traded fund (ETF) “early next week”. CNBC writes about this.

According to the interlocutor of the TV channel, the company will send documents to the U.S. Securities and Exchange Commission (SEC) when the agency approves the futures ETF. Recall that last Friday the Commission allowed ProShares to launch this product.

Grayscale’s plans to convert Bitcoin Trust (GBTC) into an exchange-traded fund became known in July. Then the company said that its products are at different stages of the life cycle. But “each of them will be transformed into an ETF in the future.”

The largest trust

GBTC is the largest trust managed by the organization. As of October 15, its volume is $38.68 billion. The total assets under management (AUM) are estimated at $52.6 billion.

In the case of Grayscale, we are talking about a spot ETF. The underlying asset of which will be Bitcoin itself, not a derivative. Many experts consider such a tool to be more effective.

Earlier, Bloomberg analysts also criticized futures ETFs, which SEC head Gary Gensler preferred. They stated that such structures “inefficiently correlate with Bitcoin,” and therefore cannot bypass spot funds in terms of profitability. According to Gensler, Bitcoin futures ETFs are more reliable because they rely on the Investment Companies Act of 1940.

Futures and spot funds

Grayscale Investments CEO Michael Sonnenshein, on the contrary, believes that the regulator is making a mistake by approving futures funds before spot funds. He called the SEC’s position “short-sighted” and said that such a product would only harm investors.

Recall that Steven McClurg, chief investment officer and co-founder of Valkyrie Investments; noted that, judging by Gensler’s words, “a purely spot Bitcoin ETF” will not receive approval in the near future.

Previously in July Valkyrie Investments raised $10 million in a Series A financing round with the participation of a wide range of investors. The company intended to use the received capital to hire additional employees and expand the product line. Valkyrie also planned to enter Asian markets when conditions allow.

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