{"id":501213,"date":"2022-10-15T21:15:00","date_gmt":"2022-10-15T18:15:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\/"},"modified":"2022-10-15T21:15:00","modified_gmt":"2022-10-15T18:15:00","slug":"grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\/","title":{"rendered":"# Grayscale BTC Trust trades at a record 36.7% discount, but is it justified?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a40fc2d10c03\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a40fc2d10c03\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\/#%E2%80%9D_Grayscale_BTC_Trust_trades_at_a_record_367_discount_but_is_it_justified_%E2%80%9C\" >&#8221; Grayscale BTC Trust trades at a record 36.7% discount, but is it justified?  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\/#What_is_an_exchange-traded_fund\" >What is an exchange-traded fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\/#Trust_funds_like_GBTC_do_not_offer_redemption_or_conversion_rights\" >Trust funds, like GBTC do not offer redemption or conversion rights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\/#Grayscale_is_fighting_the_SEC_but_results_could_take_years\" >Grayscale is fighting the SEC, but results could take years<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Grayscale_BTC_Trust_trades_at_a_record_367_discount_but_is_it_justified_%E2%80%9C\"><\/span>&#8221; Grayscale BTC Trust trades at a record 36.7% discount, but is it justified?  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvNDQzYWQ1NTQtZTVhNi00ZDJkLTkwZjUtMTE2ZDA4NWUxNTZjLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-4b69a2fe>U.S. investors have been waiting for a Bitcoin exchange-traded fund (ETF) <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roval since May <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1579346\/000119312514190365\/d721187ds1a.htm\">2014<\/a> when the Winklevoss Bitcoin Trust filed an amendment request at the Securities and Exchange (SEC).\u00a0<\/p>\n<p>Over the years, the SEC has rejected every applicant and the latest denial was issued to WisdomTree\u2019s application for a spot Bitcoin ETF on Oct. 11. The SEC concluded that the offer did not have the ability \u201cto obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules.\u201d<\/p>\n<p>Bitcoin investment trust vehicles have existed since 2013, but they have been restricted to accredited investors. Launching a spot-based BTC ETF would open the market to retail investors and a broader array of mutual funds in the industry.<\/p>\n<p>At the moment, U.S. regulators are reluctant to release what many believe would be a more fair and transparent product for Bitcoin. A conflicting reality is, while BTC spot ETFs continue to be rejected, the exact same product has long been available for bonds, global currencies, gold, Chinese equities, real estate, oil and silver.<\/p>\n<p>The Grayscale Bitcoin Trust Fund (GBTC), a U$ 12.3 billion investment fund, is currently trading at a record-high 36.7% discount versus its Bitcoin holdings, but this might not be a buy the dip-type of discount. The gap started after the Toronto Stock Exchange launched the Purpose Bitcoin ETF in February 2021, which is a spot investment product.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_an_exchange-traded_fund\"><\/span>What is an exchange-traded fund?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>An ETF is a security type that holds diversified underlying investments, including commodities, stocks or bonds. The ETF might resemble a mutual fund because it is pooled and managed by its issuer.<\/p>\n<p>SPY, the ETF that tracks the S&amp;P 500 index, is the most recognizable example of the instrument. The mutual fund is currently managed by State Street and carries $328 billion in assets under management.<\/p>\n<p>More exotic structures are also available, like the ProShares UltraShort Bloomberg Crude Oil (SCO). This fund uses derivatives and aims to offer two times the daily short leverage on oil prices, meaning investors are effectively betting on a downturn in oil prices.<\/p>\n<p>Buying an ETF gives the investor direct ownership of its contents, creating different taxation events versus holding futures contracts and leveraged positions. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Trust_funds_like_GBTC_do_not_offer_redemption_or_conversion_rights\"><\/span>Trust funds, like GBTC do not offer redemption or conversion rights<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Investment trust funds sit outside the SEC\u2019s authority and are actually regulated by the U.S. Office of the Comptroller of the Currency.<\/p>\n<p>Grayscale&#8217;s GBTC is the absolute leader in the cryptocurrency market, even though it has been structured as a company \u2014 at least in regulatory form. The investment trust is considered a closed-end fund, meaning the number of available shares are limited.<\/p>\n<p>Consequently, GBTC shares are not freely created, nor do they offer a redemption program. This inefficiency creates significant price discrepancies versus the fund\u2019s underlying Bitcoin holdings. In contrast, an ETF allows the market maker to create and redeem shares, ensuring the premium or discount is at most times minimal.<\/p>\n<p>For instance, Purpose Bitcoin ETF (BTCC.U) held a $3.59 net asset value per share on Oct. 13, and the shares closed at $3.60 on Toronto exchange. Similarly, U.S. derivatives ProShares Bitcoin Strategy ETF (BITO) underlying price was $11.94 on Oct. 13, while its shares traded at $11.95.<\/p>\n<p><strong><em>Related:\u00a0Grayscale fires first salvo in case against SEC over Bitcoin ETF refusal<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Grayscale_is_fighting_the_SEC_but_results_could_take_years\"><\/span>Grayscale is fighting the SEC, but results could take years<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In June 2022, the asset manager Grayscale initiated a lawsuit with the SEC regarding converting the GBTC into a spot-based Bitcoin ETF. The firm has been waiting for a final decision from the regulator since filing its application in October 2021.<\/p>\n<p>Grayscale&#8217;s senior legal strategist stated that the SEC rejection was &#8220;arbitrary&#8221; by &#8220;failing to apply consistent treatment to similar investment vehicles.&#8221; As a result, the asset manager pursued a legal challenge based on the SEC&#8217;s alleged violation of the Administrative Procedure Act and Securities Exchange Act.<\/p>\n<p>It must be noted that eight and a half years have passed since the first request for a Bitcoin spot ETF registry was submitted. At the moment, GBTC charges a fixed 2% yearly administration fee, so the 36.7% discount might be justified given that the SEC continues to reject appeals and requests from every fund manager.<\/p>\n<p>In essence, the investment trust product is far less optimal than an ETF, and so far, Grayscale has done little to minimize the impact on GBTC holders.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/grayscale-btc-trust-trades-at-a-record-36-7-discount-but-is-it-justified\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Grayscale BTC Trust trades at a record 36.7% discount, but is it justified? &#8220; U.S. investors have been waiting for a Bitcoin exchange-traded fund (ETF) approval since May 2014 when the Winklevoss Bitcoin Trust filed an amendment request at the Securities and Exchange (SEC).\u00a0 Over the years, the SEC has rejected every applicant and&#8230;<\/p>\n","protected":false},"author":1,"featured_media":501214,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvNDQzYWQ1NTQtZTVhNi00ZDJkLTkwZjUtMTE2ZDA4NWUxNTZjLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,74858,74863,75849,82548,76550,110604,74939,74898,22974,73785,70934],"class_list":["post-501213","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-bitcoin-regulation","tag-cryptocurrencies","tag-etf","tag-gbtc","tag-grayscale","tag-investment-trusts","tag-market-analysis","tag-sec","tag-canada","tag-markets","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/501213","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=501213"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/501213\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/501214"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=501213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=501213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=501213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}