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Grayscale May Transform BTC Trust To BTC-Settled ETF

Grayscale appears to be attempting to transform its BTC contract to a fully backed exchange fund following the SEC’s approval of a BTC exchange-traded fund (ETF). Grayscale Institutional Investments, a leading institutional investor, is allegedly contemplating transforming its Bitcoin Trust into a fully paid exchange-traded fund (ETF). On October 17, Barry Silbert, the Director of Grayscale’s parent business, Digital Currency Group, speculated that the institution’s Bitcoin Trust might be converted into a spot-settled Bitcoin fund. Grayscale has not confirmed this.

A few days after criticizing the SEC-approved cash-settled Bitcoin futures ETF on Twitter, Bitcoin pundit Preston Pysh interjected in to ask Silbert when the institution’s BTC contract will be changed to a BTC funded ETF.  Silbert reacted by saying he should watch the space. In the words of Barry Silbert (@BarrySilbert) on October 17, 2021: “stay tuned”

Worries From Grayscale Investors

Grayscale Bitcoin Trust shareholders, on the other hand, appeared to have been alarmed by Silbert’s statements, with Twitter user “@svrgnindividual” querying what a reconfiguration would entail for shareholders who own shares in Grayscale’s Bitcoin Trust. Silbert’s comments have been met with skepticism.

“If the spot ETF is authorized, what happens to the Grayscale clients who have invested in it? Has our investment been changed into ETF shares?” they inquired via Twitter. A CNBC article quoting unidentified insiders said that Grayscale was preparing for the Securities and Exchange Commission to authorize the creation of a Bitcoin ETF, prompting speculation about the company’s supposed plans for a Bitcoin ETF late last week.

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SEC ProShares Approval and Requests for A Bitcoin-Settled ETF

The Securities and Exchange Commission (SEC) announced on October 15 that it had recognized the licensing of securities issued by ProShares Trust’s futures-based Bitcoin (BTC) ETF.  The SEC has approved ProShares’ Bitcoin Strategy ETF for listing on the NYSE Arca. ProShares Trust’s Bitcoin (BTC) exchange-traded fund gives exposure to the crypto asset through futures contracts, according to an SEC notice dated Oct. 15. The ETF might launch as early as Oct. 18, according to ProShares’ post-effective modification prospectus.

If the SEC approves the application, the assets will be listed on NYSE Arca. ProShares Bitcoin Strategy ETF will be listed under the ticker name BITO, according to Bloomberg analyst James Seyffart.The adoption of the ETF has been recognized as the key driver for Bitcoin’s recent strong market activity. Nevertheless, many experts have questioned the fund’s income format, urging the SEC to authorize a Bitcoin ETF that is supported by and resolved in Bitcoin (BTC). According to Grayscale’s most recent holdings update, which was published on October 15, the firm has $52.6 billion in assets under management (AUM), with the Bitcoin Trust accounting for 73 percent of the total. Grayscale’s Bitcoin holdings are estimated to be approximately 620,000 BTC, or 3.3 percent of the entire Bitcoin supply, according to the statistics.

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Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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