- Grayscale allege the SEC acted arbitrarily in rebuffing its bid to convert its US$12 billion spot Bitcoin trust into an exchange-traded fund.
- The shift to an ETF would help them to close the fund’s near-record discount to net asset value as the ETF structure has a creation and redemption process that helps to keep a fund’s price in line with its underlying holdings.
Grayscale, one of the world’s largest crypto asset managers, has sued the U.S. Securities and Exchange Commission after the regulator denied the company’s application to convert its Grayscale Bitcoin Trust, the world’s largest Bitcoin fund, into an ETF.
Grayscale allege the SEC acted arbitrarily in rebuffing its bid to convert its US$12 billion spot Bitcoin trust into an exchange-traded fund, criticizing the rejection as “capricious” and “discriminatory” because the SEC has allowed futures-based Bitcoin ETFs exposed to similar concerns.
The Grayscale fund was started in 2013 as (at the time) the only institutional means to gain Bitcoin exposure and the company filed its plan to change the structure in October last year to an ETF.
The shift to an ETF would help them to close the fund’s near-record discount to net asset value as the ETF structure has a creation and redemption process that helps to keep a fund’s price in line with its underlying holdings.
A global wave of monetary-policy tightening to tackle high inflation has sucked liquidity from financial markets and hurt demand for speculative investments including Bitcoin.
Bitcoin, the largest cryptocurrency by market cap, has sunk about US$50,000 from a peak of nearly US$69,000 hit last November.
