SEC shaves off Grayscale

On Wednesday, the Securities and Exchange Commission rejected Grayscale Investment`s application to convert its Grayscale Bitcoin Trust (GBTC) into an ETF. Well, let's get deeper.

The SEC justified that Grayscale's ETF application sucks for "fraudulent and manipulative activities and practices." The CEO of All-Shades-Grey immediately triggered and tweeted that he was already running to the court to reconsider the decision.

Well, Grayscale is doused with big-shot lawyers and ready to fight for their righteousness and make everyone happy with their Bitcoin ETF. The SEC are tough guys and are not going to surrender. So let's see who will win in this legal swing because Ripple is still suing, but with no success.

What is an ETF, and why does Grayscale need one?

An exchange-traded fund (ETF) pools securities, such as stocks or goods, allowing investors to buy shares on the public market without directly owning the assets, f.e. bitcoins. Last October, the SEC finally allowed a bitcoin futures ETF, which offers derivative contracts that speculate on the future price of bitcoin. It has yet to authorise a spot bitcoin ETF, which would be linked to the current price of bitcoin.

According to Grayscale, Grayscale Bitcoin Trust currently has $12.9 billion under management. Grayscale Bitcoin Trust (GBTC) shares have traded well below the net value of bitcoins held by Grayscale since February 2021.