Analysts are currently attempting to predict how the process will proceed after the Securities and Exchange Commission decided not to appeal a decision that allows Grayscale Investments LLC to convert its Bitcoin trust into an exchange-traded fund. Earlier this year, the cryptocurrency asset manager won a legal battle in federal court to get its Grayscale …
Analysts are currently attempting to predict how the process will proceed after the Securities and Exchange Commission decided not to appeal a decision that allows Grayscale Investments LLC to convert its Bitcoin trust into an exchange-traded fund. Earlier this year, the cryptocurrency asset manager won a legal battle in federal court to get its Grayscale Bitcoin Trust (GBTC) converted into the first US ETF that would invest directly in the biggest digital coin. The SEC had until Friday to file an appeal of the decision. According to a person with knowledge of the issue who asked not to be named discussing the ongoing case, the agency has no plans for further appeals in the case.
According to James Seyffart, an analyst at Bloomberg Intelligence, a conversation between Grayscale and the SEC is expected to start. Next week, we’ll learn more, at which point, we’ll know what to expect. The regulator may choose to appeal the decision to the Supreme Court, though Seyffart thinks it is extremely unlikely to occur. A inquiry for comment regarding the SEC’s plans for spot Bitcoin ETFs received no response from the organisation. According to Grayscale, GBTC’s holders might gain billions of dollars by its conversion into an ETF. Its court victory was regarded as significant for the sector because it inspired hope among those who deal in digital assets that a Bitcoin ETF would finally be available in the US after a protracted legal battle. The SEC had previously been unwilling to approve approval. But many businesses are currently working to develop such a product, including BlackRock Inc. and Invesco, among others. The trust’s discount to its underlying holdings shrunk noticeably after the Grayscale decision in August, when shares of GBTC rose more than Bitcoin’s price did. The difference was around 45% earlier this year, but it has now shrunk to below 20%, according to statistics collated by Bloomberg.
Having purchased GBTC shares at the height of the company’s recent turmoil, a number of well-known investors, like Cathie Wood and Boaz Weinstein, seem to have been well-positioned for the narrowing. The ETF approval process has remained murky to industry observers since many were unsure of how the SEC would handle the asset manager’s procedures and the numerous other pending applications. Progress on the Grayscale conversion front lends greater clarity to the process. Whether the regulator would permit multiple Bitcoin ETFs to operate simultaneously is a crucial open question.
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