Last year, the world’s largest asset manager, Grayscale, applied with the Security Exchange Commission of the United States to convert its flagship fund, GBTC, into a spot bitcoin ETF.
July 26 was the deadline for approval or disapproval of Grayscale’s application by the SEC.
Michael Sonneshein, Chief Executive Officer of Grayscale Investments, commented that if GBTC gets the approval to convert into a spot bitcoin ETF, there will “no longer be a discount or premium.’’
On February 25, Grayscale’s head featured in a podcast interview with Mr. Peter McCormack. Mr. Sonneshein said he is amazed that the United States’ SEC would not want to save the investors of Grayscale and return the appropriate asset value to them.
In the interview, Sonneshein added that the SEC dishonored the legislative procedures by not approving GBTC (Grayscale Bitcoin Trust) to become an approved spot Bitcoin.
The head of Grayscale further said that the act assures that the regulator does not act in favor or “arbitrarily,” adding that by approving the Bitcoin Futures ETF, while disapproving conversions to GBTC, the SEC has acted “arbitrarily.”
Moving ahead in the Podcast, Sonneshein explained that when the SEC began approving the first bitcoin ETF, it would be a sign for Grayscale that the perspective of the SEC towards bitcoin is changing now. According to him, Grayscale has “millions of investor accounts,” with investors worldwide trusting the firm to “do the right thing for them.”
As Mr. Sonneshein mentioned, if the SEC accepted GBTC as a spot bitcoin ETF, several billion dollars of capital could be instantly returned to investors’ pockets overnight.
Notably, Grayscale is not embarrassed that it has a commercial interest in being approved as a spot bitcoin. Still, it matters to Grayscale if it will be rejected by the SEC, and then Grayscale might appeal to the Supreme Court of the United States of America.
Grayscale first applied to become a spot bitcoin ETF in early 2017. A spot-based bitcoin ETF would be an important milestone in accepting the digital asset as it would open them up to typical investors in a familiar wrapper that trades like a stock. Target has been away from the industry for more than five years.
According to Grayscale, GBTC holds roughly 3.4% of the world’s bitcoin and is owned by over 850,000 US accounts, as reported by CNBC on May 11, 2022.