- Grayscale Investments earns support from U.S. Appeals Court for its Bitcoin fund conversion.
- Lawyers urge the SEC to expedite the conversion process of Grayscale’s Bitcoin Trust.
- GBTC’s trading alignment improves notably after the August 29 court ruling.
Grayscale Investments, a renowned name in the cryptocurrency asset management industry, has turned up the heat on the U.S. Securities and Exchange Commission (SEC). Their aim is clear: get a green light to turn their main Bitcoin fund into a spot exchange-traded fund (ETF). This move comes on the heels of a pivotal decision on August 29 by a U.S. Appeals Court. The court, taking a stance different from the SEC, supported Grayscale in the matter of transforming the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
By September 5, legal representatives for Grayscale were already in touch with the SEC. They put forth an official letter, seeking a sit-down to discuss what’s next. The background to this is a courtroom disappointment for the SEC over the GBTC transformation matter.
Going into the details of the letter, Grayscale pointed out a key aspect. If the SEC had concerns outside the boundaries set by the Exchange Act—like guarding against deceitful or shady practices—such reservations should’ve surfaced by now. Grayscale added that their request to convert the fund has been waiting for approval for a duration exceeding what the SEC’s own guidelines state as standard.
With the backing of the Appeals Court, Grayscale made it clear that no legal hurdles should now stand in the way of turning GBTC into a spot ETF. They highlighted that differentiating between a Bitcoin futures ETF and a spot Bitcoin ETF doesn’t hold water legally anymore.
Wrapping up the letter, Joseph A. Hall, the attorney who penned down both this and a prior letter in July, underlined the immediacy of the SEC’s action. Hall mentioned that the vast pool of Trust investors, nearing a million, deserve an even ground without facing unwarranted waiting periods.
A significant development post the court’s decision on August 29 has been an uptick in GBTC’s discount rate. This rate, which reflects the alignment of an ETF’s market price with its actual asset worth, has shown positivity. From nearly negative 50% in December 2022, a time marked by the FTX market dip, it now stands at 20%.
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