• Grayscale Investments CEO Michael Sonnenshein recently stated that if GBTC were to gain SEC approval as a spot Bitcoin ETF, there would be “couple billion dollars” of capital returned to investors.
• In June 2022, the SEC denied GBTC’s conversion to an ETF in what Sonnenshein claims was a violation of the administrative procedures act.
• If approved, GBTC could no longer trade at a discount or premium and would instantly return asset value back to its investors.
Grayscale Bitcoin Trust Approval Could Return Billions to Investors
Grayscale Investments’ boss, Michael Sonnenshein, recently said that if GBTC gained the necessary approval from the United States Securities and Exchange Commission (SEC) to “convert” into a spot Bitcoin ETF, it could return billions of dollars of capital back into investors’ pockets.
SEC Violated Administrative Procedures Act
Sonnenshein goes on to explain how the SEC violated the administrative procedures act when they rejected Grayscale Bitcoin Trust’s (GBTC) request for conversion into an exchange-traded fund (ETF) in June 2022. The act ensures that regulators do not show favoritism or act arbitrarily.
The Possibility of Approval
When other Bitcoin ETFs started getting approved by the SEC, Grayscale took it as a sign that their attitude towards crypto was changing. With approval, there is potential for billions of dollars worth of capital going back into investors’ pockets overnight.
No More Discounts or Premiums
GBTC currently trades at a slight discount to its net asset value (NAV), however with approval it would no longer experience any discounts or premiums as an arbitraged mechanism will be embedded.
It remains unclear whether or not GBTC will receive approval as an ETF but if it does then this could potentially mean huge returns for those who have invested in Grayscale Bitcoin Trust.