SEC in Talks with Grayscale on Bitcoin ETF Application Details
The SEC is in discussions with Grayscale Investments regarding their application to convert their trust product GBTC into a spot bitcoin ETF. This decision could have significant implications for the crypto industry, as the approval of one or more ETF applications is eagerly anticipated by the sector. Grayscale has been in contact with both the SEC's Division of Trading and Markets and the Division of Corporation Finance since winning its court fight. The court decision was finalized last month, putting the application back in front of the regulator.
Ark Invest Sells Grayscale Trust Shares and Buys Block Shares Worth $5.6 Million
Ark Invest, the second-largest holder of Grayscale Trust (GBTC) shares, has sold off $3.8 million worth of GBTC shares and bought $5.6 million in Block shares. This is the second time Ark Invest has sold Grayscale shares in recent weeks, after offloading almost $5.8 million in Coinbase and GBTC shares on October 24. Block is a Bitcoin-focused payments company founded by ex-Twitter CEO Jack Dorsey, and last week reported better-than-expected Q3 earnings. Ark Invest is among the high-profile investment firms awaiting approval from the Securities and Exchange Commission for a spot Bitcoin exchange-traded fund (ETF).
ARK Invest sold approximately US$3.76 million worth of GBTC yesterday and bought US$5.61 million in Block shares.
On November 6th, ARK Invest adjusted its investment portfolio and purchased 113,326 shares of Block Inc. through its flagship products, ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and Ark Fintech Innovation ETF (ARKF). Based on Block's closing price of $49.52 that day, the total value of the transaction was approximately $5.61 million.
In addition, Ark Invest sold approximately $3.76 million worth of GBTC through ARKW. Data shows that GBTC's closing price on Monday was $26.95.
Previously, Cathie Wood, founder of investment management company ARK Invest, stated that in addition to having potential in an inflationary environment, Bitcoin can also serve as a hedge tool against deflation.
Lawyer: NYSE Arca expected to file 19b-4 on GBTC conversion
Grayscale won a lawsuit against the SEC in August, and the Washington DC Circuit Court of Appeals made an official ruling last week. Last month, the company submitted an application to the SEC to register GBTC stocks on the S-3 form under the 1933 Securities Act. The SEC needs to sign this form and the 19b-4 document submitted by NYSE Arca on behalf of Grayscale in order to continue the conversion. Jay Gould, special advisor to Baker Botts law firm, expects NYSE Arca to resubmit the 19b-4 on behalf of Grayscale, as this may be the fastest and most effective solution. If the SEC rejects the request again, Grayscale may find it necessary to "return to court."
ARK Fund reduced its GBTC holdings by a total of US$5.19 million last week
Data from ARK Invest's Ark Fund shows that it sold a total of 206,996 GBTC shares last week, valued at approximately $5.19 million at current prices. As of Friday's close, GBTC was trading at $25.07.
SEC may approve spot ETF before FTX sells GBTC, thereby eliminating negative premium concerns
FTX holds approximately $417 million in Grayscale Bitcoin Trust Fund (GBTC). Scott Jonhsson, the general partner of Van Buren Capital, stated that FTX's bankruptcy restructuring plan is unlikely to be approved before the second quarter of 2024. It is expected that the SEC will make a decision on spot Bitcoin ETF before then. If GBTC has been converted to an ETF by then, FTX's sale will not exacerbate GBTC's negative premium, as the creation and redemption process of ETFs should only track the underlying BTC price. Sean Farrell, the head of cryptocurrency strategy at Fundstrat, said that the SEC's approval of spot ETFs will help ensure that creditors are compensated and that the discount of GBTC relative to its net asset value will narrow further. Given positive catalysts, cryptocurrency prices are likely to soar overall.
GBTC has risen 225.91% during the year and is now trading at $26.79
GBTC has risen 225.91% year-to-date and is now trading at $26.79, up 2.41% for the day.
In addition, Glassnode data shows that GBTC's negative premium is currently -13.12%.
Grayscale GBTC Negative Premium Rate Has Narrowed to 13.12%
According to Coinglass data, the current negative premium rate of Grayscale Bitcoin Trust Fund (GBTC) has narrowed to 13.12%. The ETH Trust has a negative premium rate of 22.05%, the ETC Trust has a negative premium of 45.15%, the LTC Trust has a negative premium of 10.69%, and the BCH Trust has a negative premium of 9.05%.
Grayscale GBTC negative premium rate has narrowed to 13.12%
According to Coinglass data on October 24th, the current premium rate of Grayscale Bitcoin Trust Fund (GBTC) is 13.12%; ETH Trust premium rate is 22.05%. In addition, ETC Trust premium is 45.15%, LTC Trust premium is 10.69%, and BCH Trust premium is 9.05%.
ARK Fund has reduced its GBTC holdings worth approximately US$3.19 million since October.
Data from ARK Invest shows that the ARK Invest Ark Fund has sold a total of 134,992 GBTC shares since October, worth approximately $3.19 million at current prices. As of Friday's close, GBTC closed at $23.64.
