Grayscale to update the Grayscale Bitcoin Trust’s user agreement

What’s new? Investment firm Grayscale has notified the US Securities and Exchange Commission (SEC) of changes to the terms of the Grayscale Bitcoin Trust’s (GBTC) user agreement. The initiative aims to improve the trust’s operational efficiency pending approval of its conversion to a spot exchange-traded fund (ETF). The agreement has not been changed since 2018 and the update requires shareholder approval. The changes will affect aspects such as how often fees are collected and how the underlying asset is held.

SEC’s filing

What else is known? The frequency of fund management fee collections will change from monthly to daily. A second update will allow assets to be pooled in a single account to facilitate the issuance and redemption of shares. The changes will incur no additional cost to shareholders, and voting on them will continue until December 19.

The company also reiterated its commitment to launching a spot ETF, adding that the product will become available on the NYSE Arca exchange as soon as it receives SEC approval.

The company has been trying to convert the trust into a spot exchange-traded fund since October 2021. Last June, it sued the SEC for rejecting the application. The regulator attributed its rejection to concerns about market manipulation and a lack of a clear regulatory framework. No spot cryptocurrency ETFs are still allowed on the US market, while futures ETFs are allowed.

In August of this year, the court sided with Grayscale and overturned the SEC’s denial, ordering it to reconsider the application. In its decision, the court points out that the commission acted arbitrarily and inconsistently: it did not allow spot ETFs even though it had previously approved futures products that carried similar risks.

In addition to Grayscale, investment firms BlackRock, Fidelity, ARK Invest, VanEck, WidsomTree, Invesco, Bitwise, and Valkyrie are awaiting approval of applications, most of which were filed in early summer. Despite congressmen calling on the head of the SEC to approve spot bitcoin ETFs “immediately” in late September, the agency continued to delay deadlines for ruling on the applications. Grayscale itself asked the SEC to approve all applications simultaneously to give companies a level playing field.

Amid investor optimism over the launch of spot bitcoin ETFs, the discount on GBTC shares relative to the value of bitcoin fell to 8% for the first time since mid-2021. The securities began trading at a discount to bitcoin itself in early 2021 when the company suspended redemptions.

ARK Invest’s Cathie Wood sells more than 700 000 Grayscale Bitcoin Trust shares in one month

In this, the discount on securities relative to net asset value fell below 10% for the first time in two and a half years

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According to The Block, GBTC holds 621 600 bitcoins worth $23,49 billion (according to Binance’s exchange rate as of November 30). GBTC is the largest holder of the first cryptocurrency among funds.