Grayscale CEO highlights 20% GBTC share buyback option if ETF conversion fails

According to an end-of-year letter to buyers revealed on Dec. 10, Grayscale Investments’ CEO Michael Sonnenshein stated that the agency might think about “a young provide for a portion of the excellent shares of GBTC [Grayscale Bitcoin Trust]” if the latter’s exchange-traded fund conversion course of is in the end unsuccessful. Sonnenshein acknowledged that “such tender provide can be for not more than 20% of the excellent shares of GBTC” and would require each regulatory “aid” from the U.S. Securities and Exchange Commission in addition to shareholder approval to approve such provide.

Grayscale and its subsidiary over-the-counter traded fund GBTC is at present embroiled in a lawsuit with the SEC after the latter denied Grayscale’s software to transform the GBTC to a spot Bitcoin ETF on June 29, 2022. As instructed by Sonnenshein, Grayscale filed its opening temporary towards the SEC on October 11, 2022, and is because of submit its response to an SEC reply temporary by January 13, 2022, with the ultimate written temporary due on February 3, 2022. “Shortly thereafter, a three-judge panel might be chosen to listen to oral arguments and rule on the case,” Sonnenshein wrote to buyers. 

“In the occasion we’re unsuccessful in pursuing choices for returning a portion of the capital to shareholders, we don’t at present intend to dissolve GBTC, however would as an alternative proceed to function GBTC with out an ongoing redemption program till we’re profitable in changing it to a spot bitcoin ETF.”

Cointelegraph beforehand reported that GBTC, together with different main Grayscale digital foreign money funds, are buying and selling at reductions to internet asset values, or NAVs, of 34% to 69% as a result of solvency issues arising from its mum or dad firm, Digital Currency Group, and its publicity to distressed cryptocurrency dealer Genesis Global. At the time of publication, GBTC has $10.68 billion in Bitcoin (BTC) beneath administration however is simply value $5.48 billion per market capitalization.