All eyes are on the Grayscale Bitcoin Trust (NYSEMKT:GBTC) this morning. That’s because Grayscale was able to classify the trust as a spot Bitcoin (BTC-USD) exchange-traded fund (ETF) after the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded products (ETPs).
Shares of GBTC were also uplisted to NYSE Arca from the over-the-counter (OTC) market, effective as of today. No action is required for shareholders to commence this change.
“The approval of spot Bitcoin ETFs in the United States is a monumental step forward for GBTC investors and all those who realize the potential for crypto to transform our future,” said Grayscale CEO Michael Sonnenshein. “Today’s historic outcome is a testament to GBTC’s investors for their unwavering patience and support, and to the entire Grayscale team and our partners for their hard work and dedication.”
Grayscale also has plans to issue registered shares while also utilizing “simultaneous creations and redemptions.” The company believes that these actions will help GBTC more accurately track the price of Bitcoin.
GBTC ETF: 7 Things to Know as Grayscale’s Bitcoin ETF Starts Trading Today
- GBTC was the first publicly traded Bitcoin fund, having been created back in 2013. After the fund’s creation, it began trading publicly in 2015.
- The spot Bitcoin ETF carries a high expense ratio of 1.50%. That’s much higher than BlackRock’s (NYSE:BLK) iShares Bitcoin Trust ETF (NASDAQ:IBIT) sponsor fee of 0.25%.
- Other competitors are charging between 0.2% and 0.9%, according to CoinDesk.
- “Grayscale appears to be betting on investors sticking with GBTC despite the significantly higher fees, whether that be due to inertia or long-term investors held hostage by a hefty tax bill should they switch ETFs,” said Bryan Armour, Morningstar’s Director of Passive Strategies Research for North America.
- GBTC currently has 692.37 million shares outstanding and assets under management (AUM) of $28.58 billion.
- The trust owns 619,187 Bitcoin with a per share value of 0.00089 Bitcoin.
- While the SEC approved several spot Bitcoin ETPs, it did not endorse Bitcoin itself. SEC Chair Gary Gensler characterized the cryptocurrency as “primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
