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Grayscale BTC Trust ETF conversion project receives tremendous support

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Investors express their views about why the SEC should authorize Grayscale's BTC Trust's conversion to a flash ETF.

The U.S. Securities and Exchange Commission has invited public feedback on a proposed regulation modification that would transform Grayscale's Bitcoin Trust into a spot-based exchange-traded fund (ETF).

A notice of intent to file a proposed rule change to list and trade Grayscale Bitcoin Trust shares as a spot-based ETF received a long string of comments, with a huge majority expressing acceptance.

Bloomberg's senior ETF analyst Eric Balchunas evaluated some of the more recent comments on February 15 and discovered that 95 % support the proposed shift.

Many respondents on the SEC proposal stated that because the regulator had already authorized futures-based exchange-traded products, a spot-based product should logically follow. Others warned that the United States risks lagging behind other countries, such as Canada, which has approved such investment products.

A spot-based fund would be supported by the asset itself instead of futures contracts from the Chicago Mercantile Exchange (CME), and so is the case with current Bitcoin ETFs.

Another commenter mentioned that the present fund provides arbitrage opportunities for retail traders to reap the benefits.

“The current structure of the closed-end fund has led to the price of the fund trading at a premium and discount to net asset value which has created arbitrage opportunities for more sophisticated traders to take advantage of unsuspecting retail investors.”

Grayscale's Bitcoin Trust has traded at a huge discount in recent months as investors predict and buffer on the ETF's SEC approval.

According to Ycharts, the fund was trading at a 24.75 % discount currently. With BTC now trading at nearly $43,600, the discounted fund would cost around $32,500.

One investor stated that he poured his life savings into the fund and is sick of the SEC seeking to safeguard individuals, noting that the regulator is only interested to "help the rich." The financial authority has often highlighted a lack of investor safety as a cause for postponing or denying crypto-based investment products.



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