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SEC Rejects GBTC Conversion Bid; Grayscale Files Suit

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CoinSnacks
July 06, 2022 • Estimated Reading Time: 2 minutes

Last week, we received reports that the SEC had denied cryptoasset management firm Grayscale Investments’ bid to convert the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin exchange-traded fund (the SEC also denied Bitwise’s application on the same day).

Since launching CoinSnacks in 2017, the story around a potential bitcoin ETF and particularly one offered by Grayscale, has been one of our most covered stories. As we wrote on June 9th around Grayscale gearing up for this decision:

Simply, not only would a bitcoin ETF bring an enormous amount of eyeballs and capital into the crypto ecosystem from retail investors who may have been sitting on their hands to date, but it would also immediately close GBTC’s discount to Net Asset Value (NAV) that is currently ~30%. If approved, this means that investors in GBTC would immediately make 30% on their investment as the gap between where the trust trades today and its true value closes.

This is why the SECs rejection is such a hard blow. Furthermore, it is why Grayscale immediately filed suit against the SEC.

What happens next is unknown, but it’s safe to say this battle is far from over.