Grayscale CEO outlines actions after victory over the SEC

Grayscale has not formed a firm view on whether to refile the GBTC-to-ETF conversion. In an interview with Bloomberg after the court ruling in the case against the SEC, Grayscale CEO Michael Sonnenshein said.

On August 29, a U.S. courtgranted the motion to Grayscale Investments. The appellate court ordered the Commission to reconsider its decision.

In June the asset manager filed suit against the regulator for refusing to convert GBTC into an ETF. The company submitted the conversion application to the SEC in October 2021.

Bloomberg noted that the ruling does not guarantee the launch of a Bitcoin ETF. The agency is reviewing the decision, and Grayscale has yet to articulate a position.

«We will need to review the final procedures arising from the court’s order. We do not know what will be said in the ruling […] forty-five days after the verdict», Sonnenshein explained.

The firm will provide additional information as it becomes available.

According to Grayscale’s CEO, there should be no further grounds for the SEC to rely on to continue keeping these types of products off the market.

Sonnenshein added that the company has not received clarifications from the regulator since the court’s decision.

On August 29, GBTC shares jumped 17%. The next day, quotes were revised downward by 4%. The discount to net asset value (NAV) narrowed to 18%.

According to analyst James Seiffert, the discount will not fall to zero. It will be possible only after the official conversion of GBTC into an ETF, when arbitrageurs can begin operating.

In an interview Sonnenshein also said that the expense ratio would be lowered if the bitcoin trust is converted into an exchange-traded fund.

Earlier, a group of GBTC holders led by Alamedafiled suit against Grayscale.

The activist group seeks the right to redeem shares. It also seeks compensation for what it calls an exorbitant management fee, with the rate lowered to competitive levels (the current rate is 2% per year).

Earlier in Bloombergraised the probability of a spot Bitcoin ETF appearing this year to 75%.