After the filing of BlackRock’s application to launch a Bitcoin ETF, Grayscale Investments’ GBTC quotes rose by 57%, with the discount to the NAV narrowing from 41.7% to 29.3%.
Such a low reading had not been seen in a year.
During the period, the digital gold rose 21%, from around $25,000 to around $30,300. The Bitcoin Trust shares, on higher volumes, rose from $13 to $20.46.
The market began to anticipate approval of BlackRock’s application, which led to expectations that Grayscale would convert the trust’s shares into an exchange-traded fund, explained The Block Research analyst Rebecca Stevens.
Following the BlackRock filing, similar filings were submitted by Valkyrie, Fidelity Investments, WisdomTree and Invesco. In the list of applications at the SEC ARK Invest with 21Shares have priority based on the timing of their submissions.
Subsequently, the above-listed firms sent the agency amended proposals taking into account the Commission’s criticisms of the so-called joint surveillance agreement or details of this mechanism. The latter became a key addition to BlackRock’s application.
Analysts at Bernstein say the regulator cannot keep a negative stance toward spot BTC ETFs for long.
In 2021, the SEC approved products ProShares and Valkyrie Investments, based on Bitcoin futures on the CME. To date, the Commission has rejected all spot Bitcoin ETF proposals.
In October 2021, Grayscale filed for conversion of GBTC into an ETF. On December 17, the agency postponed a decision on the filing to February 2022. On June 30, Grayscale filed suit against the SEC after a negative ruling.
In December 2021, the company acknowledged that the Commission could have violated the Administrative Procedures Act in approving a Bitcoin futures-based ETF with deviations from its spot-based filing.