The fight to gain clearance from the Securities and Exchange Commission [SEC] in the United States is on, and no one wants to be left behind. Though Fidelity recently applied for SEC approval for a Bitcoin ETF, Grayscale has now announced its plans to turn its Bitcoin trust into an ETF.
“In recent months there’s been a growing number of questions around the possibility of a Bitcoin ETF in the US, and we’d like to take the opportunity to provide clarity and context on what such a development would mean at Grayscale and for Grayscale® Bitcoin Trust (Symbol: GBTC).”
It reinstated that it is was “100% committed to converting GBTC into an ETF.”
Grayscale founded GBTC in 2013 and was a leader in offering digital assets to investors in the form of shares. As a result, it was the first corporation in the United States to introduce a publicly trading Bitcoin fund and the first one to turn a Bitcoin fund into an SEC-reporting company.
GBTC, on the other hand, has been selling at a negative premium in recent months. Since late February, the Bitcoin fund has traded slightly below the price of Bitcoin, which may suggest a decrease in demand for the currency. This was a shocking turn of events, given that institutional demand for BTC had remained high, and according to Grayscale’s third-quarter report in 2020, 80 percent of investment in the trust came from institutions.
Investors were unable to benefit from the negative premium, resulting in a decrease in GBTC production. ETFs, on the other hand, have continued to outperform GBTC in terms of investment potential.
Canada recently accepted three Bitcoin ETFs, and according to sources, they have successfully entered the GBTC market. The rivalry has been fierce as the SEC has received an increased number of applications for BTC ETF.
Grayscale filed for an ETF in 2016, but discontinued its submission. With investor perception shifting significantly, analysts expect the SEC will authorise the first ETF by the end of 2021, and at this stage, any asset management company will want to be the first.
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