Evolving Investment Strategies: Grayscale Bitcoin Trust's Bid For ETF Conversion To Reduce Discount

Grayscale, a big player in the online asset managing world, is thrilled about the possible change of its Grayscale Bitcoin Trust (GBTC) into a Bitcoin Exchange-Traded Fund (ETF). This big move could wipe out the current 8.09% discount, worth about $1.89 billion. This will align GBTC’s market price better with Bitcoin’s real value. This change has massive benefits for investors.

The firm’s top law executive, Craig Salm, and head money advisor, Edward McGee, revealed the details. Assuming they get a thumbs up from the US Securities Exchange Commission, GBTC will move from their current base, OTCQX, to the esteemed NYSE Arca exchange. The goal? Make GBTC’s shares match up better with the real Bitcoin price. It also makes it easier for investors to make shares or take them away without fuss.

Bloomberg’s ETF specialist, Eric Balchunas, noted a big dependence on Regulation M (Reg M) relief. He pointed to older talks suggesting that the SEC might use Reg M to slow down or obstruct certain things, but he does not confirm this. Balchunas points out that when Regulation M got brought up—it was right after Grayscale met with the SEC. He implies this could have been a key part of these talks.

Securing Bitcoin’s True Value: GBTC & The Potential Spot ETF Impact

Bitcoin is now worth $39,481. There’s more trading happening, meaning more people are swapping Bitcoin. This shows greater interest in Bitcoin. If a spot Bitcoin ETF starts, investors could see a truer value of Bitcoin through GBTC.

In addition, more protected and regulated ways can be made for big investors to enter the Bitcoin market. Such a new plan has increased Bitcoin’s value by 3% in a day. Also, even more swaps have been made than before. This shows a lot of people are more interested in this digital money.

On the 28th of Nov, James Seyffart, a Bloomberg ETF analyst, posted on X (previously known as Twitter) that the SEC has delayed their verdict on several applications. This decision came 34 days before the due date of Jan 1, 2024.

Seyffart, working with Eric Balchunas, had earlier estimated a 90% likelihood of spot Bitcoin ETFs getting approved by Jan 10, 2024. Hoever, Seyffart believes that these twin delays hint at a planned move. He thinks it could be a strategy to prepare all applicants for possible approval by the Jan 10, 2024, deadline.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.