GBTC Premium Closing in on 2022 High as Bitcoin Spot ETF Agenda Seemingly Close to Becoming Reality

UTC by Tolu Ajiboye · 3 min read
GBTC Premium Closing in on 2022 High as Bitcoin Spot ETF Agenda Seemingly Close to Becoming Reality
Photo: Unsplash

The SEC’s approval for a GBTC Bitcoin spot ETF is a “matter of ‘when’ and not ‘if’”, according to Grayscale CEO Michael Sonenshein.

Grayscale Bitcoin Trust (GBTC) seems to be nearing its 2022 highs by way of premium Bitcoin (BTC) products, according to recent data. The world’s largest crypto asset manager initially filed to convert its flagship trust into a spot bitcoin ETF about a year ago. From GBTC’s perspective, the Securities and Exchange Commission (SEC) has proven to be a stumbling block to its spot BTC ETF agenda. However, this issue appears to be improving as the Commission faces mounting pressure to agree.

GBTC Had Threatened Legal Action over SEC’s Refusal to Approve Anticipated Bitcoin ETF

The drawn-out battle between Grayscale and the SEC on spot BTC approvals recently hit a bend when the former contemplated suing the latter. Grayscale CEO Michael Sonenshein said at the time that “I think all options are on the table”. The CEO also suggested that Grayscale will continue to support all of its investors:

“The Grayscale team has been putting the full resources of our firm behind converting GBTC, our flagship fund, into an ETF. It’s really important that investors know that we have and will continue to advocate for them.”

Furthermore, Sonenshein also encouraged investors to contribute to the public comments the SEC is trusting for spot Bitcoin ETFs. Describing it as a very important part of the process, Sonenshein said:

“GBTC today is owned by investors in all 50 states, and there’s actually now over 800,000 accounts in the US all waiting patiently to have it converted into an ETF.”

Steadying Bitcoin price action also continues to be a boon for GBTC after a harrowing year with the SEC.

After hitting record highs last November, the leading crypto’s subsequent decline contributed to an already negative “premium” on GBTC. This implied that its share price traded at a discount to the BTC spot price, hitting its biggest ever in January. During this period, the GBTC premium was nearly at -30%. Following a reversal shortly after that, the premium has seen gradual improvement and is at -21.4% as of today. It is worth noting that this figure is near its smallest for this year.

Futures ETFs Get Greenlight, Spot ETFs May Soon Secure Approval Also

Sonnenshein and several other industry players have repeatedly criticized regulators for their alleged selective favoritism. This is because while the SEC is now approving futures ETF products, Bitcoin spot-based equivalents continue to meet rejection. The situation has seen the US fall further lower in the pecking order among countries launching spot-based Bitcoin ETFs. For instance, Australia is one of the most recent to do so and could see its Bitcoin spot ETF attract up to $1 billion next week.

The Commission greenlit another futures-based ETF earlier in the month, the third to see approval. The Commission based this approval on the Securities Act of 1933 instead of the Investment Company Act of 1940. According to Sonnenshein, this development represents strengthened hope for Bitcoin spot ETFs. The SEC now has fewer excuses for its rejection of spot ETFs.

Bitcoin News, Cryptocurrency News, Funds & ETFs, Market News, News
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