Grayscale’s Bitcoin ETF Wishes On Limbo This CEO Will Do This If It FAILS
Grasyscale Investments stated that if it fails transform the world’s largest Bitcoin fund into an exchange-traded fund, it will find alternative ways to return investors of Grayscale Bitcoin Trust.
Grayscale Bitcoin Trust, also known as GBTC, has increased its discounts rate in response to the market turmoil this year. According to a report, GBTC traded at a 49% discount rate on Friday compared to Bitcoin’s price. GBTC trades as a close-end funds, and offers trading premiums and discounts. The annual fees for this fund are 2%.
Grayscale Chief Executive Michael Sonnenshein stated in a letter,
“These options could include a tender offering for up to 20% on the outstanding shares of $10.7 billion trust trust.”
According to a report from The Wall Street Journal.
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Also read: Crypto Selloff – Why Grayscale May Be Next After FTX Crash
Sonnenshein’s letter addresses the concerns of GBTC investors after the bankruptcy of FTX, the cryptocurrency exchange. The cryptoverse was shaken by the collapse of the leading exchange. Grayscale’s parent company Digital Currency Group and Genesis Global, a cryptocurrency lender, were among those most affected by the FTX crash. After it couldn’t satisfy client withdrawal requests, Genesis stopped loan originations and redemptions. DCG claimed that Genesis owes over $1.7 billion through two loans.
The Securities and Exchange Commission rejected all spot bitcoin ETF applications. These products are vulnerable to market manipulation and fraud, it claims. The SEC allowed only ETFs that track bitcoin futures to enter the market.
Grayscale believes that GBTC would trade more in line if it was made an ETF. Market players would be able issue and redeem shares to ensure that GBTC shares reflect the true value of the bitcoins it holds.
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