Trade turnover GBTC from Grayscale Investments jumped 400%, from $16.1 million to $80 million. This is how the market reacted to BlackRock filing an application for SEC to create a bitcoin ETF.
“We see positive expectations regarding the approval of the BlackRock initiative. This could make things easier for Grayscale in their quest to achieve a product to ETF conversion.” — commented in The Block.
In October 2021, Grayscale submitted a relevant application. On December 17, the SEC delayed making a decision on the appeal, and in February 2022 again postponed the date on this issue. On June 30, Grayscale sued the regulator after a negative response.
Bloomberg analyst James Seiffart saw the possible approval of BlackRock’s bid as a threat to GBTC’s valuation and potential pressure on product fees.
“On top of that, if a bitcoin trust is converted into an ETF, then investors will potentially start withdrawing funds”he added.
According to The Block, since the beginning of 2023, Grayscale has earned $230 million from crypto ETFs. The annual product management fee is 2-2.5%. Their total AUM exceeds $23.5 billion, including GBTC — $17.5 billion.
Recall that in July 2022, the Wall Street Journal editors accused the head of the SEC, Gary Gensler, of a “confusing” approach regarding the adoption of a spot bitcoin ETF. Journalists called Grayscale’s chances of winning the lawsuit against the agency high.
Spot bitcoin ETFs have been approved by regulators in Canada, Brazil, Australia, and the Netherlands.
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