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Grayscale – the world’s largest Bitcoin fund – will see its Bitcoin Spot ETF application approved or denied by next week.
Ahead of the Security and Exchange Commission (SEC)’s decision, CEO Michael Sonnenshein has issued a reflection letter to investors. He details the progress they’ve made with the transition, including thousands of SEC-directed letters from investors encouraging its acceptance.
A Drawn-Out Battle
In his letter shared on Monday, the CEO reminds investors that GBTC was designed to be an ETF since its inception in 2013. Since last year, its been embroiled in a 240-day application review process to evolve the fund into just that.
Unlike a traditional ETF, shares of GBTC are not easily created, nor redeemable. Supply and demand for such shares are largely what determines their price, rather than simply tracking a direct underlying asset.
This model has contributed to significant price discrepancies between Grayscale’s share value and its underlying net asset value. As of mid-June, GBTC shares were trading at a whopping 33% discount – an all-time low.
This discrepancy is a core part of Grayscale’s latest arguments to approve the conversion. As the fund explained to the SEC in May, allowing the transition can help unlock over $8 billion in value for current investors.
During the review process, Grayscale has launched everything from education sites to advertising campaigns to make its case known worldwide. Its executives have been in close contact with senators, regulators, media, academics, and crypto industry leaders on the matter.
The results of the campaign have borne major fruit. “Over 11,400 investors, academics, business leaders, trade associations, and other key stakeholders submitted comments to the SEC in support of Grayscale’s ETF proposal,” wrote Sonnenshein. As of June 9th, over 99.9% of those comment letters were supportive of the cause.
Many of those letters raised questions about the SEC’s seemingly contradictory approval of Bitcoin futures ETFs while rejecting spot ETFs. This fact also confounds Grayscale, which has threatened to sue the SEC if such unequal treatment persists.
The swell of Bitcoin spot ETFs in other countries – such as Australia and Canada – was also a point of concern. Investors warned that America will fall behind its global competitors on sensible crypto regulation if the SEC continues dragging its feet.
Nevertheless, Sonnenshein remains optimistic pending the SEC’s imminent decision, due July 6th.
However, his fund is ready for all outcomes. Should the SEC reject the application, Grayscale has assembled a legal team to help “articulate the importance” of the issue.
“Grayscale is unequivocally committed to converting GBTC to an ETF,” concluded the CEO. “We have left no stone unturned.”