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- Following a legal victory, Grayscale has been in active communication with the SEC’s Division of Trading and Markets and the Division of Corporation Finance.
- Grayscale’s GBTC discount dropped to its two-year low indicating growing investor confidence in the upcoming approval of the first-ever spot Bitcoin ETF.
The U.S. Securities and Exchange Commission (SEC) is engaged in discussions with Grayscale Investments regarding the specifics of the company’s request to transform its trust product, GBTC, into a traditional bitcoin exchange-traded product (ETF). This dialogue has the potential to carry meaningful consequences for the cryptocurrency industry.
The crypto sector is eagerly anticipating SEC approval of one or more ETF applications. It will be a pivotal milestone that could simplify the path for ordinary investors to participate in digital assets. Following its legal victory, Grayscale has been actively communicating with both the SEC’s Division of Trading and Markets and the Division of Corporation Finance. The information comes from an anonymous source, as these discussions are currently confidential.
Grayscale vs SEC
Grayscale has maintained a historical connection with the SEC, primarily due to its Grayscale Bitcoin Trust (GBTC). However, when the company initiated the move to convert its GBTC product to a spot Bitcoin ETF, the SEC rejected the proposal.
This led to a legal dispute in a U.S. federal court, which ultimately concluded with a panel of judges determining that the SEC’s rejection was “arbitrary and capricious.” Subsequently, the court instructed the agency to rescind its denial. The court’s decision was officially confirmed last month, returning the application to the regulatory authority’s consideration. Craig Salm, Grayscale’s chief legal officer said:
“Right now we’re just laser-focused on constructively reengaging with Trading and Markets… There are still things that have to be worked through… Overall, it’s been good engagement, and it’s a matter of when, not a matter of if anymore”.
Grayscale GBTC Discount At 2-Year Low
The Grayscale Bitcoin Trust ($GBTC) discount has reached its lowest level since November 2021, potentially signaling growing investor confidence in the forthcoming approval of the very first spot Bitcoin ETF in the United States. The GBTC discount measures the percentage by which $GBTC is trading above or below its net asset value, which is closely tied to the price of Bitcoin (BTC).
Currently, the GBTC discount stands at -12.26%, marking the lowest point since November 2021. This is a significant improvement from the -48% discount observed in December 2022 following the FTX collapse, which had a detrimental impact on investor sentiment in the crypto market.
The reduced discount reflects the optimism prevailing among market participants as they anticipate the approval of a Bitcoin ETF. Notably, the price of Bitcoin has surged by approximately 120% over the past year.
Interestingly, Ark Invest, led by Cathie Wood, recently offloaded roughly $3.76 million worth of Grayscale Bitcoin Trust ETF (GBTC) shares via ARKW. This move comes on the heels of a previous divestment in late October, where Ark Invest had sold approximately $2.5 million worth of GBTC shares. Interestingly, despite the recent sales, Cathie Wood had previously expressed confidence in Grayscale Trust’s dedication to cold storage for cryptocurrencies.
