• Grayscale Investments CEO Michael Sonnenshein discussed the importance of a spot Bitcoin ETF during an interview.
• The firm had filed a lawsuit against the U.S Securities and Exchange Commission in June 2022 after their application to convert GBTC to a spot Bitcoin ETF was denied.
• Sonnenshein expects a decision in the lawsuit by fall 2023, with oral arguments starting on 7 March.
Grayscale’s Objective
Michael Sonnenshein, the CEO of Grayscale Investments, appeared in an interview on „What Bitcoin Did“ and discussed various matters related to his company, especially its lawsuit against the U.S. Securities and Exchange Commission (SEC). He explained that from day one, when Grayscale started with the Grayscale Bitcoin Trust (GBTC), the objective was to convert the fund into a spot Bitcoin exchange traded fund (ETF). This would help avoid GBTC’s current 45% discount to its net asset value due to an arbitrage mechanism built into ETFs which keeps share prices in line with underlying assets.
Lawsuit Against SEC
The securities regulator rejected Grayscale’s application to convert GBTC to a spot Bitcoin ETF in mid 2022, leading them to file a lawsuit as a last-ditch attempt in the interest of their investors. The grounds for litigation is based on how different and arbitrary manner two similar issues were treated by SEC; thus violating US administrative procedures act. As such, if they lose their appeal they may go for re-appeal in US Supreme court according to Sonnenshein who expects a decision by fall 2023 with oral arguments starting on 7 March.
Relationship With Genesis
Sonnenshein clarified that his firm did not have any operational reliance on Genesis which was undergoing chapter 11 bankruptcy proceedings at press time; falling under parent firm DCG as well.
Importance Of Spot BTC ETF
The importance of having an ETF was highlighted by Sonnenshein due it avoiding discounts like GBTC faces currently due to arbitrage mechanisms built into ETFs keeping share prices inline with underlying assets ensuring price stability for investors alike reducing frustrations caused by current state of affairs .
Conclusion
To conclude, Michael Sonnenshein has expressed his confidence that Grayscale will make progress in their efforts towards obtaining approval for converting GBTC into BTC ETF despite SEC denying it earlier this year; expecting decisions regarding same by Fall 2023 meanwhile clarifying relationship between Grayscale & Genesis as well as importance of Spot BTC EFT while highlighting reasons behind filing case against SEC itself