Grayscale has formally requested a meeting with the U.S. Securities and Exchange Commission (SEC) to discuss the conversion of its flagship Grayscale Bitcoin Trust (GBTC) into a spot exchange-traded fund (ETF). Following a recent court ruling against the SEC’s denial of the conversion application, Grayscale’s lawyers argue that there are no legal grounds left to block the process.
Screenshot of the letter sent to the SEC by Grayscale’s retained law firm Davis Polk. Source: Grayscale
Seeking Fair Treatment for Investors
Grayscale emphasized that it believes there are no reasons to treat GBTC differently from Bitcoin futures ETFs that the SEC has previously approved. The firm urged the SEC to ensure a level playing field for the nearly one million investors in the Grayscale Bitcoin Trust.
“Now that the Court of Appeals has spoken, there is no available rationale that would distinguish a Bitcoin futures ETP from a spot Bitcoin ETP under the legal analysis previously adopted by the Commission in rejecting spot Bitcoin ETPs.”
Grayscale pointed out that its conversion application has been pending for significantly longer than the time frame stipulated by SEC rules. The firm aims to expedite the process, aligning it with market demand and the interests of its investors.
GBTC Discount Narrows
Since the August 29 court ruling in favor of Grayscale, the discount on GBTC—indicating the difference between its trading price and net asset value—has narrowed to 19.9%. This development reflects growing investor confidence in the potential approval of the GBTC conversion.
“We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible.”
Grayscale’s pursuit of converting GBTC into a Bitcoin spot ETF highlights the broader industry trend of seeking SEC approval for cryptocurrency ETFs. Such approval would enable greater access to Bitcoin for institutional and retail investors, potentially driving increased adoption of cryptocurrencies.