Grayscale hints at plans to convert Bitcoin trust into BTC-settled ETF

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Institutional funding large Grayscale is reportedly contemplating changing its Bitcoin Trust into a bodily settled exchange-traded fund (ETF).

On Oct. 17, Barry Silbert, the CEO of Grayscale’s guardian firm Digital Currency Group, hinted that Grayscale is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin fund.

After having taken to Twitter to criticize the cash-settled Bitcoin futures ETF recently approved by the U.S. Securities and Exchange Commission (SEC), Bitcoin commentator Preston Pysh chimed in to ask Silbert when Grayscale’s Bitcoin Trust can be transformed into a BTC-settled ETF. “Stay tuned,” Silbert responded.

However, Grayscale Bitcoin Trust traders seem to have been unsettled by Silbert’s remarks, with Twitter consumer “svrgnindividual” questioning what a restructure would imply for traders holding shares in Grayscale’s Bitcoin Trust.

“What happens to us Grayscale investors once the spot ETF is approved? Is our investment converted into ETF shares?” they tweeted.

Rumors of Grayscale’s purported ambitions for a Bitcoin ETF started circulating late week after a CNBC report citing nameless insiders claimed that Grayscale was ready for the Securities and Exchange Commission to lastly approve a Bitcoin ETF.

On Oct. 15, the SEC introduced it had accepted the registration of securities from ProShares Trust’s futures-based Bitcoin (BTC) exchange-traded fund. ProShares’ ETF provides traders publicity to contracts that speculate on the long run worth of BTC which are settled in money.

Related: Grayscale Bitcoin Trust FUD is now over as the last GBTC unlock totals just 58 BTC

Despite the ETF’s approval being cited as the first catalyst for Bitcoin’s recent bullish market action, many analysts have criticized the fund for its cash-settled construction, as an alternative advocating for the SEC to approve a Bitcoin ETF that’s backed by and settled in BTC.

According to Grayscale’s newest holdings update on Oct. 15, the agency boasts $52.6 billion in belongings underneath administration (AUM) — 73% of which is held within the Bitcoin Trust. The information means that Grayscale’s Bitcoin stash contains roughly 620,000 BTC or 3.3% of Bitcoin’s complete provide.