Bloomberg Analyst Eyes Bitcoin’s Future Through GBTC’s ETF Transformation

The post Bloomberg Analyst Eyes Bitcoin’s Future Through GBTC’s ETF Transformation appeared first on Coinpedia Fintech News

Bloomberg ETF analyst James Seyffart has disclosed that the chances of Grayscale Bitcoin Trust ($GBTC) converting into an ETF have drastically soared since June.

This week, he has put the chances of Grayscale’s Bitcoin Trust converting into an ETF squarely on the map. Seyffart’s assertions don’t come without substance – GBTC trading at a 26% discount to its net asset value makes his predictions hard to ignore. 

FTX Debtors Accuse Grayscale of Depriving Shareholders

FTX Debtors have taken aim at Grayscale, the company that manages GBTC. “Depriving shareholders of billions through extracting exorbitant management fees” is no small charge.

FTX Debtors are among the major shareholders of Grayscale Bitcoin Trust and Grayscale Ethereum Trust, and their legal action has sent shockwaves throughout the cryptocurrency community.

Major Shareholders Rally Behind Lawsuit Against Grayscale

Major shareholders including Alameda Research Ltd., UTXO Management, and numerous funds have launched GrayscaleLitigation.com, where eligible shareholders can join as co-plaintiffs in a lawsuit against Grayscale Investments, LLC. The lawsuit demands the repayment of excessive fees and injunctive relief to allow redemptions.

The participants have until September 1, 2023, to sign on, adding further momentum to an already volatile situation.

Court Ruling on GBTC Discount Holds Investment World in Suspense

A highly anticipated ruling from the DC Circuit Court of Appeals on Grayscale Investments’ lawsuit against the US Securities and Exchange Commission (SEC) looms large. Regardless of the outcome, it has the potential to dramatically impact Grayscale’s flagship bitcoin trust and the discount at which its shares currently trade.

Seyffart predicts that GBTC could reach “a near-zero discount” with an official announcement and timeline for its conversion to an ETF.

What’s Next for GBTC?

The court’s decision, regardless of its favor, will be instrumental in shaping the trajectory of GBTC. Should the ruling favor the SEC, industry experts believe the specifics of the decision will be paramount. A rejection based on market manipulation concerns could push GBTC towards a bigger discount, while a more benign ruling might have a lesser impact.

The discount could close significantly with a Grayscale victory, according to Chase White, senior research and policy analyst at Compass Point Research & Trading, but not entirely, as further regulatory processes could take up to 240 days.