The founder and CEO of Digital Currency Group, to which Grayscale belongs, has apparently stated that the company may soon convert its Bitcoin Trust into an ETF.
Silbert from Grayscale advises against buying futures ETFs
Yesterday, Barry Silbert published a tweet on his official profile in which he advised against buying and holding futures-based ETFs.
The fact is that to date there is still no ETF on the US markets that replicates the price of Bitcoin. The approval of an ETF based on BTC futures seems almost a foregone conclusion, but for Silbert, this is apparently a financial product of doubtful value.
Investor Preston Pysh responded to his tweet by explicitly asking when the Grayscale Bitcoin Trust (GBTC) would be converted into an ETF based on spot BTC, i.e. directly on the tokens held by the fund, as is the case with GBTC.
Silbert’s response was decidedly possibilistic.
— Barry Silbert (@BarrySilbert) October 17, 2021
He didn’t give a date, although it would seem that this is a kind of confirmation that such a conversion will take place sooner or later.
Given the firmness of his response, it is possible to imagine that the process of transforming the Trust into an ETF may already be well advanced.
The company has been thinking about this conversion for months, so much so that it is working with BNY Mellon to bring an ETF based on Bitcoin to the US market.
Good chances of conversion for Grayscale Bitcoin Trust into ETF
Grayscale’s product, GBTC, is not that different from an ETF, despite having had mixed results over time. It has raised a lot of capital and attracted a lot of investors, but its value fluctuates too much, deviating from the price fluctuations of BTC.
It is possible that converting it into an ETF could make it easier to manage the fund, and more importantly could keep the value of the ETF as close as possible to the price of BTC.
Considering that the probability of a final approval of an ETF on Bitcoin futures is now very high, it seems reasonable that even a product like GBTC, already on the market for years without any particular problems, could have a good chance of being converted into an ETF.
Grayscale has $52.6 billion in assets under management (AUM), 73% of which is concentrated in GBTC alone. The company holds about 620,000 BTC to cover the Trust, or 3.3% of the total Bitcoin supply, making it one of the largest single players in the crypto markets.
In light of this, it would seem highly unlikely that Grayscale would be denied permission to convert its Trust into an ETF, should the SEC finally approve one.