Grayscale has recently revealed through its recent filing with the SEC that it is looking to covert its GBTC into an ETF. However, the exact time this will happen depends on how fast the SEC authorizes ETFs in the country.
While the U.S. SEC has not yet approved any ETF, three have already been launched in Canada. Some weeks ago, Brazil became the second American country to launch an ETF product.
However, according to the SEC, its concern over Bitcoin ETF is the extreme volatility of Bitcoin. In 2016, Grayscale also submitted its application for an ETF but later withdrew citing regulatory reasons.
Grayscale to Address GBTC Negative Premium
At the moment, GBTC has about $38.8 billion in assets under management (AUM). The firm noted that once the SEC approves Bitcoin ETFs, it would convert the GBTC into an ETF.
American investors have been craving the approval of Bitcoin ETFs in the country due to its advantage over Bitcoin Trust. One obvious benefit is that Bitcoin ETFs allow investors to redeem their shares whenever they like unlike the GBTC that subject the shares to a lockup period.
The GBTC has traded in a negative premium for a month now even though Bitcoin is currently trading around $59,785. This suggests that institutional investors are selling off their shares in the trust. In a bid to provide a solution, the parent company of Grayscale has proposed to buy $250 million worth of GBTC shares.