Grayscale Investments on Tuesday firmly communicated to the U.S. Securities and Exchange Commission (SEC) that there are "no grounds" to deny the transformation of its Grayscale Bitcoin Trust GBTC into an exchange-traded fund (ETF).
What Happened: In a letter penned by Grayscale's legal team, the investment giant highlighted the recent decision by the U.S. Court of Appeals, which overturned the SEC's prior disapproval of the trust's ETP conversion. (ETFs are a subset of ETPs.)
The letter emphasized the trust should not be treated differently from other ETPs that invest in Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME).
The company pointed out that any rationale to differentiate spot Bitcoin ETPs from Bitcoin futures ETPs would have already emerged in one of the 15 Commission orders that previously rejected spot Bitcoin Rule 19b-4 filings.
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Why It Matters: Grayscale's letter also pointed out the financial implications of the delay.
It mentioned the trust's shares trading at a substantial discount could be rectified if the trust received the same treatment as Bitcoin futures ETPs.
On the day the Court of Appeals announced its decision, the discount tightened significantly, returning over $2 billion in value to investors.
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