Grayscale has always insisted on using a physical model when converting the Bitcoin Trust Fund (GBTC) into a Bitcoin spot ETF, unlike other issuers who have compromised by using a cash model. However, Bloomberg ETF analyst James Seyffart pointed out that Grayscale indicated in its revised S-3 filing that it finally accepted the cash model.
VB Capital General Partner Scott Johnsson pointed out that although the SEC claims that the cash model is to protect investors, in fact it may bring greater risks to investors who want to invest in Bitcoin through spot ETFs. This is because the cash model means that investors cannot hold Bitcoin directly, but instead invest indirectly through cash contracts. Such indirect investments may be subject to risks such as market manipulation and illiquidity, as the Bitcoin price may be out of touch with the actual market price. Therefore, investors need to be cautious
He commented: Although other spot commodity ETFs operate in a physical mode, the Bitcoin spot ETF must be completed through a novel cash method, and whether this is effective is still unknown.
It is understood that the SEC’s move to prevent brokers from directly handling Bitcoin is to better track Bitcoin transfers and mitigate potential risks related to anti-money laundering or KYC compliance.
It should be noted that at the same time, Barry Silbert, the founder and CEO of Grayscale’s parent company Digital Currency Group, announced his resignation from Grayscale Director position. This decision attracted widespread attention and discussion. His position will be taken over by Mark Shifke, DCG’s chief financial officer, which is also considered a change in Grayscale’s management. This news is of great significance to the entire digital currency industry and has also triggered speculation and concern about the future development of Grayscale.
Market analysts speculate that Silbert’s departure may greatly increase the possibility of Grayscale successfully converting GBTC into a Bitcoin spot ETF. Ramah Luwalia, chief executive of Lumida Wealth, said Silbert's resignation was likely to be voluntary to improve the ETF's chances of approval as the SEC investigates Silbert and DCG. In this way, Silbert's departure opens a new window for Grayscale to re-evaluate its products under the scrutiny of regulators. This may pave the way for GBTC to transform into a Bitcoin spot ETF, as Silbert’s departure may reduce regulators’ concerns about Grayscale and GBTC. In addition, Silbert’s departure may also mean that Grayscale will take more proactive measures to deal with regulatory issues, thereby increasing the chances of the ETF being approved. Overall, Silbert’s departure has helped GBTC’s negative premium rate narrow to -5.51%
At the same time, the price of GBTC in the secondary market has also continued to rise, with an increase of more than 22% in the past month, and the current trading price per share reaches $35.65.
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