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Wednesday, August 10, 2022

Grayscale BTC Trust Conversion Has Unconditional Support

Grayscale Bitcoin Trust, arguably the grandfather of crypto-funds, may have just realized a long-held dream. At least in name, it became an exchange-traded fund (ETF). On October 19, it formally applied to the US Securities and Exchange Commission to convert its fund into a BTC spot ETF.

Despite the SEC’s objections to a spot ETF, investors have expressed their opinions, with one advocating Grayscale’s BTC Trust becoming a spot ETF.

Grayscale Has Widespread Support

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On February 15, Bloomberg’s Senior ETF analyst Eric Balchunas said that 95 percent of its investors support the long-awaited switch.

When comparing spot ETFs to futures ETFs, different investors expressed similar interests.

The SEC, on the other hand, has continued to put off making a judgment on the former, citing concerns about Bitcoin spot ETF manipulation. The SEC, on the other hand, has already authorized three Bitcoin Futures ETFs. Countries like Canada, on the other hand, have been amenable to the same, legalizing investment products like the former.

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Nonetheless, there is a growing desire for a BTC ETF that is physically backed. The tweet also alluded to suspected market manipulation in the stock market. The point is that, contrary to what authorities have previously warned, manipulation is not limited to digital assets.

Several crypto-related companies, including Coinbase, have expressed similar concerns about this issue. In a letter to the SEC, for example, the business expressed its support for spot ETFs.

Balchunas supported the action at the time, despite the possibility of a huge competitor(s) if and when the SEC approved it.

Grayscale would transform the trust into a spot ETF if it is authorized, and the 24 percent discount opportunity would disappear. (BTC is presently trading at roughly $43,600, equating to almost $32,500 in the discounted fund.)

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