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The world’s largest bitcoin manager vows to convert digital trust into an ETF

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By Mark DeCambre

The sponsor behind Grayscale Bitcoin Trust, one of the largest digital asset managers in the world, declared that it is “100% committed” to converting its flagship fund into an exchange-traded fund.

Grayscale Investments on Monday said via a blog post it is “100% committed to converting the bitcoin trust into an ETF,” noting that “the timing will be driven by the regulatory environment.”

GBTC, referring to the ticker symbol for the Grayscale Bitcoin Trust /zigman2/quotes/203330852/delayed GBTC -4.23% , would rank second with around $36 billion in assets among commodity-linked ETFs, behind only SPDR Gold Shares /zigman2/quotes/200593176/composite GLD +0.28% , which has around $60 billion in assets.

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Grayscale submitted an application for a bitcoin ETF back in 2016, becoming one among a number of entities attempting to launch the first crypto-backed ETF, which is seen as paving the way to greater retail adoption for bitcoin and the broader virtual asset complex. An ETF could also be held more easily in a retirement account and other kinds of standard investment portfolios.

Grayscale later withdrew its application. Recent efforts to make another run at a bitcoin-backed ETF come amid a new fervor among institutions to be the first in the U.S. to roll out a crypto fund with an ETF wrapper.

Fidelity  applied last month  to launch a new bitcoin ETF and a number of other companies, including VanEck, SkyBridge Capital, and WisdomTree Investments are seeking approval from the Securities and Exchange Commission for a crypto fund.

Grayscale’s trust is only accessible to qualified investors.

Rising prices of bitcoin /zigman2/quotes/31322028/realtime BTCUSD -2.18% and other alt coins are behind the renewed enthusiasm. A single bitcoin was trading at around 58,000 Monday on CoinDesk, with the world’s No. 1 crypto gaining over 100% so far in 2021.

Meanwhile, the No. 2 largest crypto, and the second-largest by market value, ether on Ethereum’s blockchain touched an all-time high at $2,144.93 over the weekend. Ether /zigman2/quotes/108573964/realtime ETHUSD +5.48% was changing hands at $2,104, at last check.

Crypto watchers say that Grayscale may also be eager to convert its GBTC to an ETF because of worries that prospective new fund entrants offering greater accessibility to investors might erode its current dominance. Investors point to GBTC’s net asset value trading at a discount to bitcoin when it used to trade at a premium as evidence of some loss of market share to competitors.

Grayscale is currently trading at roughly 4% discount to bitcoin, based on MarketWatch’s calculations, compared with an average premium of 37% over the past five years, according to Ycharts.com .

Grayscale Bitcoin Trust has gained 65% so far this year, compared with a more than 100% year-to-date gain for underlying bitcoin. Those gains far outstrip those for equities and gold. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.24% is up nearly 10% so far in 2021, the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.72% has gained over 8.5% thus far this year, while gold futures /zigman2/quotes/210034565/delayed GC00 +0.33% are down nearly 9% this year.

/zigman2/quotes/203330852/delayed
US : U.S.: OTC
$ 44.90
-1.99 -4.23%
Volume: 7.43M
May 10, 2021 3:08p
P/E Ratio
0.92
Dividend Yield
N/A
Market Cap
$32.46 billion
Rev. per Employee
N/A
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/zigman2/quotes/200593176/composite
US : U.S.: NYSE Arca
$ 172.07
+0.48 +0.28%
Volume: 7.04M
May 10, 2021 3:23p
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/zigman2/quotes/31322028/realtime
US : CoinDesk
56,719.54
-1,262 -2.18%
Volume: 0.00
May 10, 2021 3:22p
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/zigman2/quotes/108573964/realtime
US : Kraken
4,123.99
+214.17 +5.48%
Volume: 457.78M
May 10, 2021 3:22p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,860.10
+82.34 +0.24%
Volume: 249.64M
May 10, 2021 3:23p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,202.30
-30.30 -0.72%
Volume: 1.61B
May 10, 2021 3:23p
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US : U.S.: Nymex
$ 1,837.30
+6.00 +0.33%
Volume: 245,654
May 10, 2021 3:13p
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