Grayscale Investments, the world’s largest digital asset manager, held a meeting last week with the US Securities and Exchange Commission (SEC), according to CNBC. The talks between the parties were to persuade the watchdog to approve its flagship fund into an ETF.
According to a 24-page presentation obtained by CNBC, converting Grayscale Bitcoin Trust into an NYSE-listed ETF would broaden Bitcoin (BTC) access, improve investor protection and unlock up to $8 billion in value for investors.
Since early 2021, the trust has been trading at a discount of 25% of the price of its underlying asset, a discount that will disappear upon conversion, the company pointed out. As per Grayscale, GBTC owns more than 850,000 US accounts and holds roughly 3.4% of the world’s Bitcoins. Fund assets ballooned to $30 billion before the recent crypto retrenchment brought them down to $20.1 billion. Institutional investors like Ark Invest’s Cathie Wood used the fund to bet on Bitcoins.
“The SEC is discriminating against issuers by approving Bitcoin futures ETFs and denying bitcoin spot ETFs,” Grayscale commented. In Grayscale's opinion, spot bitcoin ETFs are no riskier than futures-based ETFs because both markets are affected by the underlying price of bitcoin and closely track each other.
Grayscale in Europe?
Grayscale plans to expand beyond North America into Europe. A series of meetings have been held between the fund manager and potential partners to help materialize the plans, according to the Financial Times.
“We’re conducting some research, meeting with different organizations and different partners to determine what is going to be the best way for Grayscale to bring a lot of that accessibility, a lot of the insights we have to European investors,” Michael Sonnenshein, the Chief Executive Officer of the company, told the Financial Times.
Sonnenshein expressed concerns about 'double standards' in cryptocurrency regulation in a recent interview with the Financial News. He describes it as ‘very difficult to understand’ why the SEC continues to reject spot ETF proposals despite its comfort level with futures ETFs.
