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mariacallous · 2 years

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A group of activist shareholders in the world’s largest bitcoin investment trust, GBTC, is plotting a coup. The unlikely patchwork of hedge funds, asset managers, and amateur investors is trying to unseat Grayscale Investments, the steward of the trust, whose management they claim has cost them billions of dollars.

Since 2015, GBTC has been marketed as a simple way for regular people to invest in bitcoin without having to deal with an exchange, send crypto between wallets, or figure out how to store it safely. The value of GBTC shares is linked to the price of bitcoin: For every new share created, a fraction of a bitcoin is added to a pot, anchoring its value.

In a series of adverts targeting the general public, some of which aired on major US TV networks, Grayscale described bitcoin as “the future” and the ideal investment for retirees and other investors that “deserve the best.” Now, GBTC shares are owned by hundreds of thousands of amateur investors.

At the start of 2021, the shares, which had consistently traded at a higher price (sometimes even double) than the underlying bitcoin for years, slumped to 52 percent of the value of bitcoin in mid-December, meaning that for every $1 in bitcoin that shareholders own through the trust, they can only claim back $0.52 by selling their GBTC shares on the market. In aggregate, the discount created a multibillion-dollar hole in investors’ pockets.

“Investors are in limbo,” says Christian Galíndez Beltrán, a shareholder who claims to hold around $200,000 in bitcoin via the trust. “I’m really worried about not being able to redeem the totality of my money.”

Another investor, who asked not to be named for fear of repercussions from the brokerage at which he works, says he purchased roughly $30,000 in bitcoin through GBTC with the goal of hedging against inflation as he prepares for retirement. Although his financial situation has not been too badly damaged, he says the performance of the trust has “ill-affected” his marriage; his wife, who “fears the loss is permanent,” has taken to calling him a “bitcoin bozo.”

Thousands of GBTC shareholders like these have registered their support for the activist campaign, according to David Bailey, founder of BTC Inc and hedge fund UTXO Management, and leader of one strand of the movement.

“That’s what makes this a unique situation,” says Bailey. “This product is sold on brokerage platforms in individual retirement accounts. This is your mom and dad thinking they are diversifying their portfolio.”

WIRED spoke to six GBTC shareholders, all of whom told similar stories. One person said they have the entirety of their savings tied up in GBTC, while another has taken on additional work to ensure he is able to sustain himself into retirement.

Bailey claims that more than 50 institutions, some of which hold several hundred-million-dollar stakes in GBTC, are also involved in the rebellion to unseat Grayscale, representing a total of at least 20 percent of GBTC shares. He claims to be unable to provide proof, citing investor privacy and legal considerations, but supplied WIRED with web traffic and form submission data that suggests at least 2,000 investors have joined the campaign.

Michael Sonnenshein, Grayscale CEO, says his firm is going nowhere. “We have absolutely no intention of stepping down from our role,” says Sonnenshein. “Our trust agreement explicitly states that we would have to voluntarily step down—and our work is not done.”

But the activists are unperturbed. “Our expectation is that, through the pure groundswell of people that want to get out of this thing, pressure is going to be put on,” says Steven McClurg, chief investment officer at asset management firm Valkyrie, another ringleader of the campaign to overthrow Grayscale. “There are a lot of ways to affect change.” He refused to elaborate on what he meant. McClurg describes this information as “secret sauce.”

Crossed Wires

The group spearheaded by Bailey, called RedeemGBTC, wants Grayscale to reduce its 2 percent management fee, which it describes as “predatory,” because it’s calculated against the trust’s bitcoin reserves, not the price of the severely discounted shares. The group also wants Grayscale to allow investors to exchange their shares directly for the underlying bitcoin—in a process known as redemption—as soon as possible.

The nature of the trust’s fee structure, lawyers representing Bailey’s hedge fund have claimed, creates a “perverse incentive” for Grayscale to maximize the number of shares in the trust and restrict redemptions: They argue that the greater the number of shares in the trust, the larger the pot of bitcoin, which swells the revenue generated by management fees.

McClurg describes this arrangement as a “hostage” situation: Investors cannot exit without absorbing a large markdown on the price of bitcoin.

However, the demands mapped out by Bailey and RedeemGBTC are an unhelpful oversimplification of the situation, suggests Grayscale, which claims to be doing everything in its power to do right by its investors.

Namely, Grayscale has entered into a legal battle with the US Securities and Exchange Commission (SEC) over its campaign to convert the trust into an exchange-traded fund, or ETF, which would let investors cash in their shares for the bitcoin in the pot.

On June 29, 2022, the SEC announced it would not grant permission to convert the trust, citing fraud and market manipulation concerns. Grayscale has sued the SEC over the decision, which it calls “arbitrary and capricious.” The two parties are scheduled to present their respective cases to a judge on March 7 and Grayscale expects a final decision to be reached by the autumn. The firm is bullish about the prospects of an ETF of this kind coming to market: “It’s a matter of when, not if,” says Sonnenshein.

Although Grayscale could reduce its fees in the meantime, Sonnenshein argued in a recent interview with crypto journalist Laura Shin that the funds are best directed toward the ongoing legal battle with the SEC. Once the trust has been converted into an ETF, Grayscale promises to reduce its fees immediately.

There has also been a “meaningful misunderstanding,” Sonnenshein tells WIRED, among frustrated investors, who say that Grayscale could apply to the SEC for exemption from rules that prevent them from cashing out. The only way to apply for exemption, says Sonnenshein, is to pursue conversion to an ETF.

Bailey’s lawyers have also argued that Grayscale could allow investors to cash out without dealing with the SEC at all. But it’s not that simple either, says Sonnenshein, because of a cease and desist letter issued by the SEC in 2016 that prevented the trust from issuing new shares and allowing shareholders to cash out simultaneously.

The complexity of the securities laws that apply to trusts like GBTC creates opportunity for disagreements of this kind. “It’s a spider’s web,” says Andrew Parish, a veteran crypto founder with close relationships to parties across the industry. “It’s a mess that can hardly be understood by anyone other than accountants and lawyers.”

Pretenders to the Throne

Contenders to take over from Grayscale have emerged from the ranks of the rebellion, including McClurg’s Valkyrie. Bailey also has skin in the game: Not only does his hedge fund hold $2.5 million in GBTC shares, but his companies also have a combined $113,000 stake in Valkyrie. If Valkyrie were to succeed in its bid to take on the management of GBTC, it would absorb hundreds of millions of dollars in annual management fees, and Bailey would profit indirectly.

But Bailey also says he holds a stake in DCG, Grayscale’s parent company, that’s greater in value than his Valkyrie position, so he also stands to lose if Grayscale is forced out. “This started because we were frustrated our fund had lost some money on its [GBTC] investment,” says Bailey, “But once we started to receive comments from people about how they had been affected, it became something else. [We realized that] people need immediate relief.”

While Sonnenshein says Grayscale is always willing to hear investors out, he has reservations about the credibility of the RedeemGBTC campaign, which is run almost exclusively through Bailey’s personal Twitter account and a simple website.

“We always appreciate the opportunity to engage with any and all of our investors,” says Sonnenshein. “[But] it’s tough to take seriously a Twitter account as a standalone, as compared to the nearly 1 million investor accounts we have across the US … Anyone could go to the website and say they have one share or 10 million shares—and there’s no verifying it.”

But RedeemGBTC is not the only group Grayscale has to contend with. In December, investment firm Fir Tree filed a lawsuit against Grayscale in an effort to force the firm to hand over information that might assist in an investigation into potential mismanagement and conflicts of interest. The lawsuit asserts that Grayscale’s “shareholder-unfriendly actions” have harmed Fir Tree customers that hold GBTC shares, many of which are pension funds.

This was followed in late January by a lawsuit filed by asset management firm Osprey Funds claiming Grayscale made “false and misleading statements in its advertising and promotion” that gave investors the impression that GBTC’s conversion into an ETF was a “foregone conclusion.” Osprey also claims Grayscale’s approach to advertising has made it impossible for competitors, including itself, to accrue meaningful market share.

Like Valkyrie, Osprey has called on Grayscale to step down as sponsor and put itself forward as a replacement. In an open letter, Osprey CEO Greg King promised to cut the management fee by 75 percent, seek immediately to implement a redemption program, and collaborate with regulators instead of pursuing litigation.

The Fir Tree and Osprey lawsuits were described by Jennifer Rosenthal, vice president of communications at Grayscale, as “baseless” and “frivolous,” respectively. “We remain steadfast in our belief that the conversion of GBTC to an ETF is the best long-term product structure for investors, and are 100 percent committed to that endeavor,” she says.

As it stands, the various parties are locked in a stalemate; Grayscale says it’s not going anywhere and remains confident in the strength of its case against the SEC, while the activists are scratching their heads over how to remove the firm.

In the meantime, the situation threatens to devolve into a mud-slinging contest, says Parish, as Grayscale tries to ride out this difficult period.

It is not necessarily in Grayscale’s interest for the conversion to an ETF to take place too quickly, he says, because the recent negative press around DCG and its subsidiaries (the lending unit of one subsidiary, Genesis, filed for bankruptcy in January) would likely cause investors to run for the exit at the earliest opportunity, taking millions of dollars in management fees with them.

“The entirety of Grayscale’s strategy here is to limit redemptions and then PR, PR, PR. And to fight legal battles on whatever field they have to fight,” claims Parish.

Sonnenshein contests the idea that activating redemptions would trigger a customer exodus, arguing that the “regulated, battle-tested” ETF structure will attract an even larger audience and an even greater amount of capital into bitcoin. He also says that converting the trust into an ETF has been the plan from the outset. “This is something that investors want and deserve,” he says.

If the courts were to rule against Grayscale and the company exhausts all remaining legal avenues of appeal, Sonnenshein says it would pursue a tender offer whereby a portion of shareholders are bought out of their shares at a price established with “investor fairness” in mind.

But RedeemGBTC and Fir Tree do not share Grayscale’s conviction in the strength of its case against the SEC, which is described by the pair as “doomed” and “wasteful,” respectively, and point to the need for an urgent resolution to the situation.

“If we thought Grayscale was going to be successful [in converting GBTC to an ETF], we wouldn’t try to stop it. We just don’t think it’s going to happen—so something has to be done,” says Bailey.

Three other shareholders say they believe it is unlikely for an ETF to be approved while Gary Gensler, sitting chairperson of the SEC, remains in charge. (Gensler’s term is due to end in 2026.) The SEC declined to comment.

“They [Grayscale] are going to dig their heels in and fight to the very end, but it’s not going to bode well for them,” says McClurg. “Financial services is a confidence game; when your clients lose faith, you’ll never get them back. In the long run, I think they’re done.”

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bitcoincables · 8 months

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Democratizing Bitcoin Investment: Exploring the Grayscale Bitcoin Trust

Cryptocurrency investment products, like the Grayscale Bitcoin Trust (GBTC), make it easier for people to invest in digital currencies. GBTC allows individuals to access Bitcoin without needing to buy and store it directly. It works like a fund that invests in Bitcoin, so investors can buy shares of the fund instead of buying Bitcoin itself. This helps democratize the crypto market and make it accessible to a wider audience.

Investing in cryptocurrency can also be a way to diversify an investment portfolio. Cryptocurrencies like Bitcoin are unique assets that are not closely correlated with traditional financial markets. Including Bitcoin in a diversified portfolio can help reduce risk and uncertainty. GBTC specifically focuses on Bitcoin, so investors can add it to their portfolio without having to deal with the complexities of owning and storing Bitcoin directly.

GBTC is also important for institutional investors, as it contributes to the adoption of digital currencies in the mainstream financial system. It helps legitimize the crypto market and provides a regulated and compliant way for institutions to invest in Bitcoin. This boosts market stability and attracts a broader range of investors. GBTC has been a popular choice for both individual and institutional investors, although it has faced criticism for trading at premiums or discounts to its net asset value.

If you want to read more about the Grayscale Bitcoin Trust, you can check out the original article here.

#cryptocurrency #investment #Bitcoin #Grayscale

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coinmystique · 8 months

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The Grayscale Bitcoin Belief (GBTC) share value has once more made headlines. Its premium or discount to Bitcoin’s internet asset worth (NAV), usually considered as an indicator of institutional sentiment in direction of the cryptocurrency, has displayed a notable development lately, even amid the prevailing bearish ambiance.GBTC’s Evolving Worth DynamicsThe phenomenon of GBTC’s share value inching nearer to Bitcoin’s market value is price noting. The correlation between the 2 has been traditionally vital, with value variations usually shedding mild on broader market sentiments.Based on information from CoinGlass, a famend crypto monitoring platform, the GBTC shares had been recorded buying and selling at a 17.17% discount to the BTC/USD price as of September ninth, the final replace.Grayscale GBTC Premium chart towards BTC/USD and asset holdings. | Supply: CoinglassSuch ranges haven’t been witnessed since December 2021, highlighting a doubtlessly shifting sentiment available in the market. The so-called “GBTC Premium,” beforehand a surplus, has been a reduction to the online asset worth for some time now.The shift was drastic at one juncture that the variations neared roughly 50% final November. Such variance has led to a divergence between GBTC’s efficiency and Bitcoin’s value power, particularly as Bitcoin revisits value zones it hasn’t seen up to now six months.Greyscale GBTC premium reaching 50% discount. | Supply: CoinglassWhat This May Imply For BitcoinThe narrowing of GBTC’s discount isn’t simply an remoted occasion. It paints a broader image of potential market sentiment shifts and future actions. Notably, a shrinking discount will be interpreted as an indication of rising institutional curiosity, because the GBTC serves as a outstanding avenue for establishments to achieve publicity to Bitcoin with out immediately holding the asset. If institutional curiosity is certainly on the rise, this might bode properly for Bitcoin’s mid to long-term value outlook.Nonetheless, Bitcoin is at the moment seeing a downtrend. The asset has plunged almost 15% up to now month and a couple of% within the final 24 hours. In consequence, its value has fallen beneath the lately established $26,000 mark, buying and selling at $25,175 on the time of writing.Bitcoin (BTC) value is shifting sideways on the 4-hour chart. Supply: BTC/USDT on TradingView.comBased on Cryptocon, a dealer and analyst, Bitcoin would possibly see a weaker efficiency this month as October usually brings a turnaround and extra decisive value motion.September is traditionally a fairly unhealthy month for #Bitcoin, that’s simply the information.October is traditionally very bullish.However perhaps, it’s November that can carry the flip round we want in line with our efficiency because the halving dates.To be… pic.twitter.com/Olg0XHVxKG— CryptoCon (@CryptoCon_) September 11, 2023This attitude aligns with a prevalent crypto neighborhood principle that marks November twenty eighth as a quadrennial “bull run launch” for Bitcoin.Featured picture from iStock, Chart from TradingViewSupply: https://www.newsbtc.com/bitcoin-news/gbtcs-discount-narrows-amid-bitcoins-downturn-but-a-bullish-trend-is-coming/

#Bitcoin

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basechop · 8 months

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Grayscale Bitcoin Trust (GBTC) Sell-Off May Lead to 40% Bitcoin Price Drop

The ongoing sell-off of the Grayscale Bitcoin Trust (GBTC) could potentially result in a further 40% decline in the price of Bitcoin (BTC), according to analysts from the Webull trading platform. As the Grayscale Bitcoin Trust continues to experience outflows since the approval of spot Bitcoin ETFs in the United States, investors are withdrawing funds from the trust. Although the price of Bitcoin has already decreased, analysts believe that there is still room for further decline. According to the report, about 70% of GBTC shareholders are still in profit, with an average purchase price of $27.82, nearly 20% lower than the current value. These shares are currently trading at around $35. The second-largest group of shareholders acquired shares in the range of $18 to $21, and they may still be in profit even if the GBTC price drops by an additional 39%. However, in such a scenario, investors would sell an additional 230,000 BTC (worth $8.9 billion) on over-the-counter platforms. As a result, Grayscale would retain approximately 350,000 BTC. If the Bitcoin price does not fall below $39,000, the issuer of the spot Bitcoin ETF can expect income of $200 million with a 1.5% commission. Analysts suggest that this indicates the asset management fund is a serious competitor to other companies, despite their lower commissions. Webull specialists emphasize that if the Grayscale sell-off continues, the price of BTC could drop by 40% to $23,000, the lowest level since May of the previous year. They also acknowledge the possibility that the influence of the trust could intensify if over-the-counter liquidity dries up. Since January 10, a total of $3.5 billion has been withdrawn from Grayscale. The assets under management (AuM) have also fallen from the yearly peak of $29 billion to $22.1 billion. The GBTC discount has almost disappeared, with the current indicator at -0.34%. On January 23, it was reported that the bankrupt cryptocurrency exchange FTX liquidated $1 billion worth of Bitcoin trust shares. Some hoped that the outflow from ETFs would finally slow down. However, investors later transferred an additional 17,000 BTC to Coinbase Prime. The net outflow eventually amounted to 15,000 BTC (about $600 million). As of the latest available data from CoinGecko, Bitcoin is trading at $40,241. Over the last 24 hours, the asset's price has increased by 3.5%, but over the past two weeks, it has decreased by a total of 11.6%. Disclaimer: The information provided is for informational purposes only and does not constitute financial advice. Users should conduct their own research and seek professional advice before making investment decisions. Read the full article

#AssetManagement #Bitcoin #Bitcoinprice #BTC #Cryptocurrency #GBTC #GrayscaleBitcoinTrust #OTCLiquidity #Outflows #Sell-Off #spotETF #Webull

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kutongdejimie · 8 months

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Digifinex Labs: JPMorgan Warns of Potential Bitcoin Selloff Following Spot ETF Launch and Grayscale Outflows

According to Panigirtzoglou, the Bitcoin price has experienced a decline of more than 10% since the launch of spot Bitcoin ETFs, attributing this drop to profit-taking behavior, commonly referred to as “buy the rumor, sell the fact” dynamics. He suggests that investors anticipated the approval of the spot Bitcoin ETFs, causing the price of Bitcoin to rise above $47,000. However, after the approval, the cryptocurrency’s value dropped, and at the time of the statement, it was trading at $41,697.

The analyst specifically points out a $1.5 billion outflow from Grayscale’s GBTC fund as a contributing factor to the downward pressure on Bitcoin prices. He suggests that investors who had previously bought GBTC at a significant discount to Net Asset Value (NAV) in anticipation of its eventual ETF conversion have now taken full profits by exiting the Bitcoin space entirely, rather than shifting to cheaper spot Bitcoin ETFs.

Panigirtzoglou mentions his previous estimate that up to $3 billion was invested in GBTC in the secondary market during 2023 to take advantage of the discount to NAV. With $1.5 billion already exiting, he speculates that there could be an additional $1.5 billion yet to exit the Bitcoin space through profit-taking on GBTC. This potential further outflow could exert additional pressure on Bitcoin prices in the coming weeks.

It’s important to note that market dynamics are complex, and various factors can influence cryptocurrency prices. Analyst opinions are based on their interpretation of available data and market trends, and actual outcomes may vary. Investors should consider multiple perspectives and conduct thorough research before making any financial decisions.

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viperallc · 8 months

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SEC Approves Bitcoin ETFs: A New Era for Crypto Investments

Anticipation for SEC’s Approval of Bitcoin ETFs Crypto enthusiasts are eagerly awaiting the decision of the U.S. Securities and Exchange Commission (SEC) on the approval of multiple spot bitcoin ETF applications, expected to be announced possibly on Wednesday. This move signals a significant shift in the regulatory landscape, potentially paving the way for broader acceptance and accessibility of bitcoin in mainstream investment channels.

Implications of Spot Bitcoin ETF Launch The imminent reality of a spot bitcoin ETF has shifted the focus to its operational aspects, including trading mechanisms, cost implications, and its impact on bitcoin’s valuation. Key considerations include assessing the extent to which current bitcoin price movements are influenced by anticipatory demand and evaluating potential premium or discount valuations post-launch.

Competitive Fee Structures in the Bitcoin ETF Market The burgeoning bitcoin ETF market is seeing fierce competition among issuers, leading to a price-sensitive environment. For instance, Cathie Wood’s ARK Invest, in collaboration with 21Shares, initially proposed a 0.8% fee for their bitcoin ETF, but later announced a zero-fee policy for the first six months. This trend of competitive pricing is evident across various issuers, with some offering no fees for initial periods, while others like Grayscale are charging higher fees.

Breakdown of Spot Bitcoin ETF Fees

Bitwise (BITB): No fee for first six months, then 0.2%

ARK Invest/21Shares (ARKB): No fee for first six months, then 0.21%

Invesco Galaxy Bitcoin ETF (BTCO): No fee for first six months, then 0.39%

iShares Bitcoin Trust (IBIT): 0.12% initially, then 0.25% after 12 months

VanEck Bitcoin Trust (HODL): 0.25%

Franklin Bitcoin ETF (EZBC): 0.29%

Fidelity Wise Origin Bitcoin Trust (FBTC): No fee until July 31, 2024, then 0.25%

WisdomTree Bitcoin Trust (BTCW): No fee for first six months, then 0.3%

Valkyrie Bitcoin Fund (BRRR): No fee for first three months, then 0.49%

Grayscale Bitcoin Trust (GBTC): 1.5%

Hashdex Bitcoin (DEFI): 0.9%

Trading Efficiency and Market Impact Industry experts like Reggie Brown, GTS co-global head of ETF trading and sales, and Matt Hougan, CIO of Bitwise Asset Management, assert that these ETFs are expected to trade efficiently with minimal impact on trading dynamics. The underlying bitcoin market is highly liquid, ensuring that the ETFs can operate without significant disruptions.

The Future of Bitcoin ETFs and SHA-256 ASICs The launch of Bitcoin ETFs is a critical milestone in the cryptocurrency world, likely to significantly impact market dynamics and propel mainstream bitcoin acceptance. This move is expected to boost the demand and prices for next-gen SHA-256 ASICs, essential in bitcoin mining, as the ETFs attract a wider investor base and increase bitcoin-related investment and trading activities. This heightened demand is set to notably alter the valuation of these mining tools.

Rising Value of SHA-256 ASICs in Bitcoin’s Ecosystem The introduction of Bitcoin ETFs, enhancing bitcoin’s accessibility and appeal, is expected to significantly increase the demand and value of advanced SHA-256 ASICs, crucial for bitcoin mining. This demand, driven by both institutional and casual investors, is likely to boost the prices of these ASICs and play a vital role in shaping bitcoin’s future valuation and market accessibility. The ETFs’ role in attracting a broader investor base marks a pivotal moment in the evolution and growth of the bitcoin ecosystem.

The key to winning over investors in this scenario is believed to hinge on the balance between fees and liquidity, as per market analysts. Notably, major players like BlackRock and Ark/21Shares have revised their fee structures, proposing rates between 0.2% and 1.5%. Additionally, many are offering an initial period of zero fees. Liquidity, however, might take precedence for those who plan to frequently trade these products.

A wave of digital marketing efforts is expected from companies to promote these developments. Firms such as Bitwise and VanEck have already started advertising campaigns highlighting Bitcoin as a viable investment option.

Steven McClurg, the Chief Investment Officer at Valkyrie, commented on the situation as being quite unique, especially with the simultaneous launch of 10 similar ETFs. Valkyrie’s ETF was also among those approved on Wednesday.

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#crypto #crypto currency #crypto mining #cryptoexchange #bitcoin #etf

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virtualcurrencyspace · 10 months

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Huge Influxes Into Grayscale Bitcoin Trust In Anticipation Of ETF Approval

A significant number of Grayscale Bitcoin Trust (GBTC) shares have been bought in the secondary market this year at a deep discount to net asset value (NAV) in anticipation the trust’s conversion to an exchange-traded fund (ETF) will be approved by the U.S. Securities and Exchange Commission (SEC), JPMorgan (JPM) said in a research report Thursday.

The bank estimates a net $2.5 billion has flowed into GBTC since the start of the year, increasing to $2.7 billion if adding the covering of short interest.

https://www.coindesk.com/markets/2023/11/24/grayscale-bitcoin-trust-could-see-27b-of-outflows-if-etf-conversion-is-approved-jpmorgan/amp/

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blockchainfeed · 10 months

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#Blockchain #Crypto

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bennettforster · 10 months

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Digifinex Labs: Grayscale Trust Discounts Narrowing as Optimism Grows Amid Crypto ETF Expectations

Investors are witnessing a gradual reduction in the discounts applied to shares of Grayscale’s Bitcoin and Ethereum trusts, reflecting increased optimism surrounding the potential approval of spot crypto ETFs.

It’s essential to note that GBTC shares are not easily accessible to all investors, with eligible shares quoted on the OTC Markets Group. The value of these shares has experienced fluctuations, sometimes manifesting as significant premiums or discounts.

Historically, drops in Bitcoin prices have contributed to reduced demand for GBTC, resulting in the Trust’s shares trading at values significantly lower than the actual worth of the underlying bitcoins it holds.

Recent shifts in industry sentiment reflect growing confidence among observers that the U.S. Securities and Exchange Commission (SEC) will ultimately approve an exchange-traded fund (ETF) directly holding Bitcoin. This change in perception is contributing to the narrowing of discounts on Grayscale’s trust shares, signaling a potentially evolving landscape for cryptocurrency investments.

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douglasstoby · 11 months

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Digifinex Research: Bitcoin Spot ETFs Edge Towards U.S. Reality

“This decision doesn’t necessarily ensure Grayscale’s bitcoin trust will morph into an ETF,” Kiely emphasized. “However, it does pave the way for Grayscale’s application to proceed.” Furthermore, he pointed out the implications for future U.S. spot bitcoin ETFs, suggesting they could help the U.S. align more closely with European and Canadian markets, where such ETFs already resonate with investors.

On Monday morning in Asia, Bitcoin (BTC) saw a rise of approximately 4.5%, fueled by the hope that a bitcoin exchange-traded fund might receive the green light in the imminent future. This uptick turned around a week of losses, positioning Bitcoin just shy of the $28,000 mark. This increase appears to be an extension of the market’s Friday response to the SEC’s non-appeal decision concerning Grayscale.

Following this announcement, not only did bitcoin prices surge, but the closely monitored crypto market metric known as the “GBTC discount” also saw significant contraction, marking its tightest point in almost two years. By Friday, shares of the Grayscale Bitcoin Trust (GBTC) were trading at a 15.87% discount to its net asset value — a rate not witnessed since December of the prior year, as per YCharts data. This discount trajectory has consistently moved towards this recent contraction, especially considering its dramatic near 50% drop during December’s bear market peak.

#btc #sec #etf #digifinex #eth #btcetf

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#btc #cryptotrading

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dencyemily · 8 months

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Grayscale Dominates NYC Skyline with Bitcoin Ads: The Crypto ETF Wave Sweeps the City

In the midst of the aggressive marketing push for Bitcoin ETFs, Grayscale's BTC Trust ETF is grappling with significant outflows, witnessing billions being withdrawn in the past week. This movement has triggered increased market volatility and underscores a notable shift in investor behavior, particularly concerning ETFs.

Despite the outflows experienced by Grayscale, the overall interest in spot ETFs remains substantial. Grayscale's potential sale of Bitcoin holdings has also left its mark on market prices, with analysis firm Arkham noting a movement of over $400 million worth of Bitcoin to Coinbase Prime, potentially indicating a forthcoming sale.

Observations from Bloomberg Intelligence's Eric Balchunas highlight that GBTC shares are trading at a 0.9% discount to their net asset value, likely a result of selling pressure. However, CryptoQuant expert Julio Moreno offers a different perspective, suggesting that the recent Bitcoin price correction is more aligned with traders taking profits rather than Grayscale's BTC sales. Moreno highlights the balance in the market as other issuers acquired nearly 72,000 BTC, potentially offsetting the selling pressure from Grayscale's actions. The evolving dynamics in the Bitcoin ETF space continue to shape market sentiments and investor strategies.

#Grayscale #Bitcoin ETF #NYC #BlackRock #Bitwise #BTC #Cryptotale

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metamoonshots · 11 months

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Bitcoin briefly soared towards $30,000 following a false spot Bitcoin ETF approval info earlier than swiftly retreating to the $28,000 degree. However an precise approval might add $1 trillion to the crypto market, in accordance with the newest report by CryptoQuant. The subsequent wave of Bitcoin institutional adoption seems to be advancing within the type of monetary establishments providing entry to the flagship cryptocurrency investing to their shoppers by way of spot Bitcoin ETFs. $1 Trillion Market Cap Increase A number of corporations, corresponding to BlackRock, Bitwise, VanEck, Constancy, and Valkyrie, amongst others, have utilized to launch spot Bitcoin Change Traded Funds (ETFs). Whereas these aren't anticipated to get approvals this yr, business consultants imagine inexperienced lights might be on the horizon, doubtlessly as early as March 2024. On this case, Bitcoin might witness inflows of $155 billion. The entry of recent cash might additional increase Bitcoin’s market cap by $450-$900 billion, CryptoQuant stated in its newest report. “We might anticipate $155 billion will stream into the Bitcoin market as soon as these ETFs are authorised. The whole Belongings Below Administration (AUM) of those corporations are round $15.6 trillion. In the event that they have been to place 1% of their AUM into these Bitcoin ETFs, the whole US greenback quantity that may enter the Bitcoin market can be ~$155 Billion. To place it in context, these quantities signify virtually a 3rd of the present market capitalization of Bitcoin.” In previous bull markets, Bitcoin’s market capitalization has sometimes expanded at a fee of three to five instances larger than its realized capitalization. This suggests that for every further greenback coming into the Bitcoin market, the market capitalization might doubtlessly develop by 3x to 5x, CryptoQuant defined. Moreover, the anticipated capital inflow from spot ETFs is poised to surpass the funds that flowed into the Grayscale Bitcoin Belief (GBTC) throughout the earlier bull market cycle. Operated by Digital Forex Group (DCG), GBTC is presently the world’s largest cryptocurrency fund, managing over 620k BTC holdings. Ferver Surrounding Spot Bitcoin ETF Deceptive experiences regarding BlackRock’s spot ETF approval created a stir within the cryptocurrency market earlier this week. However the total sentiment stays robust. The bullish outlook can be evident within the ongoing discount of the discount on Grayscale Bitcoin Belief (GBTC), which hit its lowest level in 22 months final Friday. The narrowing low cost has ignited optimism as spot Bitcoin ETFs in america edge nearer to turning into a actuality. SPECIAL OFFER (Sponsored) Binance Free $100 (Unique): Use this link to register and obtain $100 free and 10% off charges on Binance Futures first month (terms).PrimeXBT Particular Provide: Use this link to register & enter CRYPTOPOTATO50 code to obtain as much as $7,000 in your deposits.

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bitcoincables · 8 months

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The End of an Era: Grayscale Bitcoin Trust's Arbitrage Trade Eliminated

The Grayscale Bitcoin Trust (GBTC) has eliminated its premium/discount following its conversion into an exchange-traded fund (ETF), marking the end of an arbitrage trade that was both profitable and risky. GBTC, which has a value of around $21 billion, now trades at a slight premium to its net asset value. Previously, its structure allowed for large premiums to its underlying holdings, which later turned into double-digit discounts. Hedge funds were known to exploit this through an arbitrage strategy involving borrowing Bitcoin, exchanging it for GBTC shares, and selling the shares after a lock-up period. However, this trade lost its allure when physically-backed Bitcoin ETFs were introduced in Canada in 2021, resulting in GBTC's price falling below the value of its underlying coins and negatively impacting the market. The conversion of GBTC into an ETF has shifted its trading dynamics. Unlike before, GBTC now has authorized participants who create and redeem shares, aligning the fund's price with its net asset value. The move has closed the door on the previous arbitrage opportunities and is seen as a significant development for the cryptocurrency market, where traders can no longer exploit market inefficiencies with leverage. This has led to GBTC's once-popular premium disappearing and stabilizing its price. While Grayscale's victory in converting GBTC into an ETF has been celebrated by the Bitcoin community and viewed as a progress towards acceptance, it has also resulted in outflows from the fund. Traders have been withdrawing funds due to GBTC's relatively high fees compared to its ETF competitors, such as Fidelity and BlackRock, which eventually charge lower fees after a waiver period. The outflows are also expected to continue if the fees are not reduced. Despite this, GBTC remains a significant player in the Bitcoin market and continues to offer regulated exposure to the cryptocurrency. Read the original article on Yahoo Finance: here. #GBTC #bitcoin #ETF #crypto

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coinmystique · 8 months

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Grayscale’s Bitcoin Funding automobile (GBTC) share costs shut in opposition to the Bitcoin value, now buying and selling 17% under the BTC value. The discount between BTC and GBTC has dropped to its lowest since December 2021.Grayscale at present holds $17.10 billion price of BTC. This follows a current win by Grayscale in opposition to the Safety Change Fee(SEC). In its ruling, the courtroom said that the SEC did not show the stability of chances that it had an inexpensive rationalization for stopping Grayscale’s transfer to transform GBTC right into a spot Bitcoin ETF. This win noticed the share value of Grayscale Bitcoins belief rise, lowering the hole on its underlying property value.Grayscale BTC discount hits lowest since 2021The belief’s shares have traded at a reduction to BTC’s market worth since 2021, which reached lows of as much as 50% in December 2022. The incapability of changing GBTC to BTC in a fund resembling Grayscale considerably reduces its demand in comparison with different accessible alternate options resembling Proshares Bitcoin Technique ETF and Bitcoin ETFs, resulting in undesirable discount. The discount was carefully correlated with the demand for the GBTC shares. The SEC approval for the primary Bitcoin ETF will probably improve the demand for the shares, additional narrowing the discount.GBTC’s fortunes have improved significantly after the world’s largest asset supervisor, BlackRock, introduced it meant to file an software for the US’ first Bitcoin ETF. The information was excitedly welcomed by Grayscales officers, who had been already in an ongoing battle with the SEC over turning GBTC right into a spot ETF.The SEC has not but accredited any spot software, irritating choices in lots of initiatives. The fee has delayed its choices on the purposes for Valkyrie Funds, Invesco, WisdomTreee Funds, and Blackrock. The Jacobi FT Wilshire Bitcoin ETF was not too long ago launched on the European inventory alternate in Amsterdam on August 15. The ultimate choice nonetheless falls on the SECRegardless of Grayscale’s win in opposition to the SEC, stating that the explanations for blocking the ETF weren't convincing, it's nonetheless upon the SEC to approve, delay, or deny in making a conclusion on whether or not to permit the funding product. Bitcoin spot ETFs could also be accredited with Grayscale’s victory in opposition to the fee. Nonetheless, delays may doubtlessly scale back the demand for the GBTC shares. Michael Sonnenshei, Grayscales CEO, said that the success is a step nearer to realizing the US spot Bitcoin ETF dream. The authorized officer additionally famous that the property administration agency would work carefully with the regulator to convey GBTC to the New York Safety Change as a spot Bitcoin ETF. The continued narrowing of the notorious discount will depend upon the regulator’s last choice. In line with the ETC Group CEO, the approval possibilities have elevated after the win. Nonetheless, the SEC can nonetheless attraction the courtroom’s choice or deny purposes for different causes. The discount has been diminished this 12 months; nevertheless, this might widen if the market will get indications that the SEC is unlikely to make an approval.Pleasure for the Bitcoin bulls?On the time of writing, BTC at present traded under $25,500, in line with knowledge by CoinMarketCap. Traditionally, September is a foul month for BTC because it tends to make as much as 10% losses. October, however, is traditionally bullish. A chart by Crptocon suggests watching out for indicators of life from BTC in November through the pre-halving years.The subsequent Bitcoin halving is ready to happen in April 2024. This replicates the speculation that November 28 is the “bull launch date” for BTC value each 4 years. Nonetheless, even with the Bitcoin ETF anticipation, the market nonetheless doesn't replicate optimism as what analysts time period a muted response.The GBTC impression, regardless of permitting traders to accumulate BTC at a 24% discount, remains to be met with skepticism because of the construction of the fund and the uncertainty of the SEC approval. Supply: https://www.cryptopolitan.com/grayscale-btc-discount-narrows-sec-victory/

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