Grayscale To Convert World’s Biggest Bitcoin Fund Into A Spot Exchange-Traded Fund (ETF)

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Grayscale To Convert World’s Biggest Bitcoin Fund Into A Spot Exchange-Traded Fund (ETF)
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  • Grayscale Investments plans to convert its bitcoin fund to a spot ETF.
  • The firm is said to make a formal application with the SEC in the coming days being buoyed by the recent future-based bitcoin ETF.
  • Grayscale’s spot ETF offers investors a berth of alternatives if it garners approval from the SEC.

Grayscale is hatching a move that would see the conversion of the largest bitcoin fund to a spot exchange-traded fund. It will trigger a 75-day window for the SEC to deliberate on whether or not to grant such approval.

Grayscale To Make The First Bold Move

After nearly 8 years, the SEC yielded to the demands of the cryptoverse to approve a futures-based Bitcoin ETF but Grayscale is seeking to go for the real deal – a bitcoin spot ETF. It intends to achieve this by filing an application with the SEC for the conversion of the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF.

An unnamed source told CNBC that the application will open a 75-day window for the SEC to scrutinize the details of the proposed ETF and give its verdict. The exact date for the filing of the application has not been revealed but analysts remain confident that it may be filed in the coming days.

Grayscale made their intention clear in September in defiance of Gary Gensler’s comments of preferring a Bitcoin futures ETF. David LaValle, Grayscale’s Head of ETFs said, “Gensler’s comments have not changed our business strategy, and we will utilize and leverage an ETF wrapper to bring other products to market such as traditional equity-based ETF.” He went on to say that the firm is not “sitting back” with their feet up.

The Grayscale Bitcoin Trust was founded in 2013 and currently has $38.7 billion worth of assets in its management. Despite the promise it holds for investors, analysts believe that the chances of approval for Grayscale’s application remain slim. Dave Nadig, Director of Research at ETFTrends notes that the proposed move “puts GBTC at the back of the line, not the front. 

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What A Spot ETF Means For Investors

There is no doubt that the SEC’s approval of a futures-based Bitcoin ETF offers myriad benefits from larger capital inflow to increased adoption rates. However, a spot ETF will be a huge leap forward for the entire industry.

Anthony Pompliano, a bitcoin maximalist commented that a spot ETF “would be better for investors, both from a price tracking and fee structure standpoint”. There is the advantage of accurate pricing as prices are closely tracked to offer investors the real deal without uncertainties.

An approval of Grayscale’s application will certainly create a buzz for the asset that could set off a major price rally. Bitcoin currently trades at $62,229, only 4.40% away from its previous high of $64,863 that it achieved back in April.