Institutional investment giant Grayscale is considering converting its Bitcoin Trust into a Spot settled Bitcoin exchange-traded fund.
Grayscale was awaiting final approval of a Bitcoin ETF
Barry Silbert, the CEO of Grayscale’s parent company Digital Currency Group, hinted that Grayscale is planning to convert its Bitcoin Trust into a spot-settled Bitcoin ETF. After A tweet of Silbert that criticized the recently approved Bitcoin futures ETF, Bitcoin commentator Preston Pysh asked Silbert when Grayscale’s Bitcoin Trust would be converted into a BTC-settled ETF. Silbert replied to the question with “Stay tuned”.
Rumors of Grayscale’s alleged ambitions for a Bitcoin ETF began to circulate late this week after a CNBC report claiming that Grayscale was awaiting final approval of a Bitcoin ETF from the Securities and Exchange Commission, but investors appear to have been rattled by Silbert’s comments. Some users asked what restructuring would mean for investors holding Grayscale’s Bitcoin Trust shares.
— Barry Silbert (@BarrySilbert) October 17, 2021
Analysts have criticized futures-based ETFs
On October 15, the SEC announced that it had accepted the registration of the securities of ProShares Trust’s futures-based Bitcoin (BTC) exchange-traded fund. ProShares’ ETF provides investors with exposure to contracts that speculate on the future price of BTC and are settled in cash.
Although the ETF’s approval is seen as the primary catalyst for the recent price performance, many ETF experts have criticized the fund for its cash-settled structure. They have instead advocated that SEC should approve a Bitcoin ETF that is backed by BTC and settled in BTC.