Grayscale manages the largest bitcoin (BTC) fund in the world with the Grayscale Bitcoin Trust (GBTC). The problem with GBTC is that the fund’s shares have been trading below bitcoin’s market value for some time now. At the time of writing, that discount has even risen to more than 34 percent and Grayscale wants to change that by transforming the fund into an exchange-traded fund (ETF).
No spot bitcoin ETF yet
So far, however, it has not been a resounding success. The US Securities and Exchange Commission (SEC) is currently not waiting for a spot bitcoin ETF. For this reason, all applications for such investment products have so far been rejected, including those from Grayscale.
However, Grayscale does not stop there, because the company of CEO Michael Sonnenshein has started a lawsuit to enforce a spot bitcoin ETF. After an initial hearing, Sonnenshein is optimistic about the possible judge’s verdict in the case between Grayscale and the SEC.
For a long period of time, the SEC’s position was that the bitcoin market was not yet mature enough for ETF products. Although that was frustrating for Sonnenshein, he at least still agreed.
“There was no imbalance in the products that came to market,” Sonnenshein said The Block. That changed when Teucrium introduced a bitcoin futures product under the Securities Exchange Act of 1934.
Unclear why SEC continues to disapprove
Before Teucrium marketed its bitcoin futures ETF under the ancient Securities Exchange Act of 1934, all bitcoin futures products were marketed under the Investment Company Act of 1940. Sonnenshein believes that with this admission, the SEC no longer has good arguments to block a spot bitcoin ETF.
“If the SEC is comfortable enough with bitcoin futures contracts to launch a bitcoin futures ETF, then they should be comfortable enough with the underlying spot market.”
Said a somewhat frustrated Sonnenshein. If it is up to Sonnenshein, Grayscale therefore has a good chance to settle this lawsuit in its favor and soon be one of the first to market a spot bitcoin ETF. That could also give the market a huge boost, as it makes bitcoin accessible to a huge group of investors.