Grayscale Investments, one of the world’s leading digital currency investment companies, with $52.6 billion Asset Under Management (AUM), plans to apply to convert its bitcoin trust into a spot ETF this week.
According to CNBC, a source stated that Grayscale had intended to file its application to the United States Securities and Exchange Commission (SEC) as soon as the agency approved a futures-based bitcoin ETF.
This happened on Friday when the SEC approved ProShares futures ETF, which is expected to start trading this week.
If Grayscale goes ahead with the application this week, according to the source, there will be a 75-day review period. If approved, Grayscale’s ETF would be another step in the legitimization of the flagship cryptocurrency asset, bitcoin.
Many analysts believe that the bitcoin-futures ETF’s impending debut, while significant, is considered an inadequate step because it would be linked to derivative contracts traded on the Chicago Mercantile Exchange (CME) rather than actual bitcoin.
Grayscale’s spot bitcoin application, however, represents an investment that is backed by bitcoins, with no derivatives tied to it. Grayscale has a significant chunk of the world’s bitcoin holdings in storage for its trust known by the GBTC ticker. GBTC had $38.7 billion in assets under management as of Friday.
What you should know
Since the May 2021 crash, bitcoin has proven resilient, approaching all-time highs as it trades above $62,000, as of the time of this writing, despite so many regulatory FUD (Fear, Uncertainty and Doubt) being passed around.
The last FUD comes from China, reiterating their ban on cryptocurrency last month, making it the third time this year they have banned the market from operating in the communist nation.
Grayscale Investments is a pioneer in cryptocurrency investing which enabled institutional investors like Ark Invest’s Cathie Wood to bet on bitcoin.
The company originally publicly filed for an ETF in January 2017 but it however, withdrew the application in October of that same year after the SEC indicated that it was not comfortable with the bitcoin and cryptocurrency market.
Last month, Grayscale’s CEO publicly criticized the SEC’s apparent preference for futures-based ETFs, calling it a “shortsighted” move that could harm investors.