Grayscale’s Bitcoin ETF Dreams On Limbo? The CEO Claims To Do This If It Fails – Crypto News – Crypto News
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Grayscale’s Bitcoin ETF Dreams On Limbo? The CEO Claims To Do This If It Fails – Crypto News

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3 years ago

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Grasyscale Investments said that if it fails to turn the world’s largest bitcoin fund into an exchange-traded fund, it will find other ways to return the portions of investors of the Grayscale Bitcoin Trust.

Grayscale Bitcoin Trust also as GBTC has widened its discount rate eventually following the turmoil in the market this year. GBTC, on Friday, was trading at a 49% discounted rate compared to the price of Bitcoin, according to a report. GBTC does its trading as a close-end fund, it offers premium and discounted offers on trading. The annual fee for the fund is 2%.

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Michael Sonnenshein, Chief Executive of Grayscale, said in a letter that

“These options could include a tender offer for up to 20% of the outstanding shares of the $10.7 billion trust,”

as per a report by The Wall Street Journal.

Also read: Crypto Selloff: Why Grayscale May Be Next In Line After FTX Crash?

What does the Grayscale letter aim at?

The letter from Sonnenshein aims to deal with the concerns of GBTC investors following the bankruptcy of the cryptocurrency exchangeftx. The crash of the leading exchange had shaken the entire cryptoverse. Among those affected by the FTX collapse include Grayscale’s parent company, Digital Currency Group, and cryptocurrency lender Genesis Global. Genesis halted loan originations and redemptions after it was unable to satisfy client withdrawal requests, and DCG claimed Genesis owed over $1.7 billion through two loans.

Until now, the Securities and Exchange Commission has rejected spot bitcoin ETF applications. It claims that these products are susceptible to fraud and market manipulation. Only ETFs tracking bitcoin futures were permitted to enter the market by the SEC.

According to Grayscale, making GBTC an ETF would help its share price trade in line. To make sure that the shares of GBTC reflect the true value of the bitcoins it has, market players would be able to issue and redeem shares.

Shourya is a crypto fanatic who has developed interest in Business Journalism in the past few years. Currently, working as a writer with Coingape, Shourya is also an avid reader. Apart from writing, you can find her attending poetry shows, exploring cafes and watching cricket. As she says, “dogs are my home,” her first rescue of a dog was at the age of 7! She has constantly been speaking up for mental health and rainbow pride.

The content presented may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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