Institutional investment giant Grayscale is reportedly considering converting its Bitcoin Trust into a physically settled exchange-traded fund (ETF).
On Oct. 17, Barry Silbert, the CEO of Grayscaleโs parent company Digital Currency Group, hinted that Grayscale is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin fund.
After having taken to Twitter to criticize the cash-settled Bitcoin futures ETF recently approved by the U.S. Securities and Exchange Commission (SEC), Bitcoin commentator Preston Pysh chimed in to ask Silbert when Grayscaleโs Bitcoin Trust would be converted into a BTC-settled ETF. โStay tuned,โ Silbert responded.
stay tuned
โ Barry Silbert (@BarrySilbert) October 17, 2021
However, Grayscale Bitcoin Trust investors appear to have been unsettled by Silbertโs remarks, with Twitter user โsvrgnindividualโ questioning what a restructure would mean for investors holding shares in Grayscaleโs Bitcoin Trust.
โWhat happens to us Grayscale investors once the spot ETF is approved? Is our investment converted into ETF shares?โ they tweeted.
Rumors of Grayscaleโs purported ambitions for a Bitcoin ETF began circulating late week after a CNBC report citing anonymous insiders claimed that Grayscale was waiting for the Securities and Exchange Commission to finally approve a Bitcoin ETF.
On Oct. 15, the SEC announced it had accepted the registration of securities from ProShares Trustโs futures-based Bitcoin (BTC) exchange-traded fund. ProSharesโ ETF offers investors exposure to contracts that speculate on the future price of BTC that are settled in cash.
Related: Grayscale Bitcoin Trust FUD is now over as the last GBTC unlock totals just 58 BTC
Despite the ETFโs approval being cited as the primary catalyst for Bitcoinโs recent bullish market action, many analysts have criticized the fund for its cash-settled structure, instead advocating for the SEC to approve a Bitcoin ETF that is backed by and settled in BTC.
According to Grayscaleโs latest holdings update on Oct. 15, the firm boasts $52.6 billion in assets under management (AUM) โ 73% of which is held in the Bitcoin Trust. The data suggests that Grayscaleโs Bitcoin stash comprises roughly 620,000 BTC or 3.3% of Bitcoinโs total supply.
