{"id":769,"date":"2022-05-15T23:03:55","date_gmt":"2022-05-15T23:03:55","guid":{"rendered":"https:\/\/freakcryptos.com\/index.php\/2022\/05\/15\/grayscale-met-with-the-sec-tried-to-convince-them-to-turn-the-gbtc-into-an-etf\/"},"modified":"2022-05-15T23:03:55","modified_gmt":"2022-05-15T23:03:55","slug":"grayscale-met-with-the-sec-tried-to-convince-them-to-turn-the-gbtc-into-an-etf","status":"publish","type":"post","link":"https:\/\/freakcryptos.com\/index.php\/2022\/05\/15\/grayscale-met-with-the-sec-tried-to-convince-them-to-turn-the-gbtc-into-an-etf\/","title":{"rendered":"Grayscale Met With The SEC, Tried To Convince Them To Turn The GBTC Into An ETF"},"content":{"rendered":"


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Will GBTC get to become the first US-based spot bitcoin ETF? It doesn\u2019t look that way. The euphoria <\/span>from six months ago<\/span><\/a> turned into Grayscale hinting that it might sue the SEC if its request is denied. Currently, the climate dictates that the answer will probably be negative, but the company is not giving up. According <\/span>to CNBC<\/span><\/a>, Grayscale \u201cmet privately with the Securities and Exchange Commission last week in an effort to persuade the regulator to approve the conversion of its flagship fund into an ETF.\u201d<\/span><\/p>\n

Related Reading | Grayscale Removes Bancor (BNT) And Universal Market Access (UMA) From Its DeFi Fund<\/a><\/strong><\/em><\/p>\n

The Grayscale Bitcoin Trust, also known as GBTC, \u201cholds roughly 3.4% of the world\u2019s bitcoin and is owned by more than 850,000 U.S. accounts, according to Grayscale.\u201d For more than a year it has traded at around a 25% discount to BTC\u2019s price. According to the firm, at the moment that the SEC approves the product\u2019s transformation into an ETF, the discount will end and it will unlock \u201cup to $8 billion in value for investors.\u201d<\/span><\/p>\n

Take into account that <\/span>VanEck\u2019s<\/span><\/a>, <\/span>BlockFi\u2019s<\/span><\/a>, and other recent applications for a spot bitcoin ETF have been rejected. And that Grayscale has been applying to get one since 2017. This time around, the SEC has until July 6th to approve or deny the GBTC application.<\/span><\/p>\n

What Would Happen If The GBTC Turns Into An ETF<\/span><\/h2>\n

To answer this question, Grayscale made \u201ca 24-page presentation\u201d for the SEC. Some graphs from the document are in <\/span>the CNBC report<\/span><\/a>, although in low resolution. In general, the GBTC\u2019s transformation into a spot bitcoin ETF \u201cwould open them up to ordinary investors in a familiar wrapper that trades like a stock.\u201d\u00a0<\/span><\/p>\n

The main argument from Grayscale is that a bitcoin futures ETF already exists, and the \u201cSEC is discriminating against issuers\u201d by not letting any company create a spot bitcoin ETF. \u201cGrayscale contended that a spot bitcoin ETF is \u201cno riskier\u201d than futures-based ETFs, because the two markets are both affected by the underlying price of bitcoin and track each other closely,\u201d said CNBC.<\/span><\/p>\n

Back<\/span> in April Grayscale\u2019s CEO<\/span><\/a>, Michael Sonnenshein, felt more litigious when he said:<\/span><\/p>\n

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\u201cIf the SEC can\u2019t look at two like issues, the futures ETF and the spot ETF, through the same lens, then it is, in fact, potentially grounds for an Administrative Procedure Act violation.\u201d<\/span><\/p>\n<\/blockquote>\n

The SEC visit and the threat of legal action have not been Grayscale\u2019s only weapon. According <\/span>to CNBC<\/span><\/a>, to help transform the GBTC into an ETF, \u201cthe investment firm has helped coordinate a public letter-writing push, flooding the SEC with more than 3,000 letters in support of its application.\u201d<\/span><\/p>\n

\"GBTCUSD<\/p>\n

GBTC price chart on FTX | Source: GBTC\/USD on TradingView.com<\/a><\/pre>\n
How Would A Spot Bitcoin ETF Affect The Market?<\/span><\/h2>\n
Opinions vary. There are institutions that can\u2019t invest in bitcoin as an asset, but could definitely put their money in an ETF. Some believe that the sudden influx of funds that these people would bring would send bitcoin\u2019s price to the moon. Unlike a future ETF which only holds future contracts, a spot ETF would have to buy the bitcoin it\u2019ll represent. So, the money would definitely enter the bitcoin ecosystem.<\/span><\/p>\n
Related Reading | SEC, Ripple Agree To Extend Legal Battle Until 2023; XRP Bears The Brunt Of Case<\/a><\/strong><\/em><\/p>\n
On the other hand, Bitcoiners don\u2019t see what they deem as \u201cpaper bitcoin\u201d with good eyes. The financial instrument would represent bitcoin, but the ETF isn\u2019t the asset per se. This puts investors at risk and brings forth certain vulnerabilities to the bitcoin network. The \u201cpaper bitcoin\u201d could be considered inflation and something akin to fractional reserve banking is technically possible.<\/span><\/p>\n
In any case, neither group has the finger on the trigger. The SEC and only the SEC does.<\/span><\/p>\n
Featured Image by Aymanejed<\/a> on Pixabay | Charts by TradingView<\/a><\/pre>\n<\/div>\n

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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"
Will GBTC get to become the first US-based spot bitcoin ETF? It doesn\u2019t look that way. The euphoria from six months ago turned into Grayscale hinting that it might sue the SEC if its request is denied. Currently, the climate dictates that the answer will probably be negative, but the company is not giving up. […]<\/p>\n","protected":false},"author":1,"featured_media":770,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[750,753,752,346,749,678,751],"class_list":{"0":"post-769","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin","8":"tag-convince","9":"tag-etf","10":"tag-gbtc","11":"tag-grayscale","12":"tag-met","13":"tag-sec","14":"tag-turn"},"_links":{"self":[{"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/posts\/769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/comments?post=769"}],"version-history":[{"count":0,"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/posts\/769\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/media\/770"}],"wp:attachment":[{"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/media?parent=769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/categories?post=769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/freakcryptos.com\/index.php\/wp-json\/wp\/v2\/tags?post=769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}