Grayscale To Convert GBTC Into Bitcoin ETF
Grayscale Investment has announced its intention to transform the Grayscale Bitcoin Trust (GBTC) into an ETF.
The news comes as GBTC premium has continued its downward trend into deeper negative territory since peaking at a 40% premium in late December 2020.
Until recently, GBTC was the only serious investment fund big institutional investors could use to gain exposure to Bitcoin, and its 2% management fee had little impact on any investor who wanted a regulated way of gaining exposure to Bitcoin.
With the trust’s stringent lock-up period of 6 months, however, it means any other Bitcoin product that was more liquid and cheaper to trade, would likely impact GBTC.
Since hitting the highs of over 40% premium on 21 December, the premium has been on a continual trend downwards and moved into negative territory towards the end of February, and reached as low as -14.34% last month.
The decline has coincided with the launch of three Bitcoin ETFs in Canada, which are much cheaper, more liquid, and can be traded freely with no lock up period.
Grayscale Committed To Converting GBTC Into An ETF
The decline has surely woken the Grayscale team up, who say in a blog post that they are 100% committed to converting GBTC into a Bitcoin ETF.
‘Today, we remain committed to converting GBTC into an ETF although the timing will be driven by the regulatory environment. When GBTC converts to an ETF, shareholders of publicly-traded GBTC shares will not need to take action and the management fee will be reduced accordingly.’
‘We withdrew our application because we believed the regulatory environment for digital assets had not advanced to the point where such a product could successfully be brought to market,’ Grayscale said.
Back in 2016/17 the market certainly hadn’t matured enough, and with Jay Clayton at the helm, there was no chance a Bitcoin ETF would have been given the green light.
The Race For The First US Bitcoin ETF Is On
And with Canada successfully launching 3 Bitcoin ETFs in Q1, it’s clear the demand for Bitcoin is everywhere.
And with Bitcoin-friendly Gary Gensler expected to take over as chairman of the SEC as early as this month, we could see a Bitcoin ETF in American markets soon.
Will GBTC be the first Bitcoin ETF? The race is certainly heating up.