A federal court has ordered the SEC to review its rejection of Grayscale Investments’ application to convert the Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). This could pave the way for the US to get its first spot bitcoin ETF.
US Might Soon Get Their First Spot BTC ETF
Grayscale is the manager behind the world’s largest cryptocurrency fund, with over $30 billion in assets under management. The company first applied for GBTC to be converted into an ETF in October 2021. However, the SEC rejected the application, citing concerns about market manipulation and investor protection.
The court’s ruling is a victory for Grayscale and the cryptocurrency industry. It suggests that the SEC is open to considering applications for spot bitcoin ETFs, which have been denied in the past. If the SEC ultimately approves Grayscale’s application, it would be a major milestone for the cryptocurrency industry and could pave the way for other spot bitcoin ETFs to be approved.
Bitcoin Price Breaks Above $27K
The court’s ruling comes after a flurry of large institutions filed applications for spot bitcoin ETFs, including asset manager BlackRock and mutual-fund manager Fidelity. The SEC has approved several bitcoin futures ETFs, but has so far rejected spot bitcoin ETFs, citing concerns about market manipulation.
The Grayscale Bitcoin Trust has traded at a discount to the underlying asset since February 2021. The discount narrowed to levels of around 25% after large names filed for bitcoin spot ETFs.
Market analysts have long predicted that converting the Grayscale Bitcoin Trust (GBTC) from a closed-end fund to an ETF would eliminate its discount. This is because ETFs typically trade close to their net asset value (NAV), while GBTC has been trading at a discount to its NAV for several years.
The conversion would also make GBTC shares more accessible to investors. Currently, GBTC shares are only available to accredited investors, but they would become available to all investors if GBTC were converted to an ETF.
Following Grayscale’s win against the SEC, Bitcoin price broke above $27K and it continued to surge toward the North, now trading at $27,624.
