Everything you wanted to know about Grayscale BTC Trust but were afraid to ask!

[franky1]

It does not need to be the approval of Grayscale's ETF, I reckon it will be any ETF because the approval of 1 will be the approval of much of them.

once one gets approved, all the others will update their applications using a copy of the accepted template. thus fast approval

i still think blackrock will get approved before grayscale as the SEC wil wait for the appeals court to release guideance on what is an what is not an acceptable reason to decline, so they can use that specific reason to decline grayscale again

right now with grayscale and DCG in hot water due to the whole genesis, gemini, FTX saga. i dont see how SEC can see confidence in grayscales fund management.. where as blackrock has decades of experience

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[fillippone]

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

[dragonvslinux]

I guess the SEC will approve all of them, all at the same time.

Had always thought the opposite to be honest. Start with something like BlackRock and see how it goes before approving the others. First mover advantage goes to the favourite.

Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.

Personally I'm not convinced SEC will care that much, if we take in consideration how Grayscale was unfairly rejected, so I don't see why they would suddenly care about things now.

But regardless I think the GBTC discount is a good reflection of overall ETF sentiment, as I imagine the discount will near evaporate once first ETFs are approved, even if Grayscale are awaiting theirs.

[franky1]

I guess the SEC will approve all of them, all at the same time.

different applications have different deadlines
the SEC dont want a swarm of businesses suddenly throwing reports and actions at them. they first want to see a experienced service operating to gauge expectations of SEC workload of receiving reports. and how much auditing and overwatch is needed. and then open the floodgates to the rest if others can follow the lead

[JayJuanGee]

It does not need to be the approval of Grayscale's ETF, I reckon it will be any ETF because the approval of 1 will be the approval of much of them.

once one gets approved, all the others will update their applications using a copy of the accepted template. thus fast approval

Could be.

i still think blackrock will get approved before grayscale as the

could be

SEC wil wait for the appeals court to release guideance on what is an what is not an acceptable reason to decline, so they can use that specific reason to decline grayscale again

I am having trouble with your expectations regarding what the Appeals court is going to be doing in its guidance.


They already told the SEC that it has failed to provide any kind of a reason and so therefore the Appeals court has told the SEC and the world that the SEC's failure to provide an any kind of a reason that is not arbitrary/capricious is insufficient.

Why would the guideline tell the SEC what a good reason might be?  That makes no sense.

Generally speaking the precedence that comes from the Chevron case, I believe, is that agencies have a wide range of reasonableness and courts are not going to second guess them as long as they provide a reason and any reason that does not devolve into arbitrary/capricious or otherwise in violation of various public policy norms.. Now that the court has proclaimed that the SEC had already acted arbitrary/capricious, the SEC has to come up with some kind of a reason that makes sense in the context of things rather than making it seem that they are just making shit up.. and why would the court give them guidance in regards to how to do their job in terms of thse kinds of matters, does not make a lot of sense to me.

Chevron remains the standard but the SEC already got themselves into a bit of a pickle by what the court had already ruled their behavior to be, which is arbitrary/capricious and really lacking any kind of a reasonableness .. and the court would not even need to agree with the SECs reasons as long as they can come up with something that makes some kind of sense and does not devolve into again being arbitrary, capricious or in violation of some other public policy norms.

Your overall point about the possible stalling tactics of the SEC to use the muddiness of trying to figure out what to do might be enough of a reason to grant Blackrock (and maybe others) before Grayscale, even though that could end up getting them into trouble if it appears that delay Greyscale is a kind of retaliation rather than also having some kind of rational basis that makes some kind of sense in the whole scheme of things.

right now with grayscale and DCG in hot water due to the whole genesis, gemini, FTX saga. i dont see how SEC can see confidence in grayscales fund management.. where as blackrock has decades of experience

Yes, it seems reasonable that the SEC could have some doubts in regards to a lot of the outstanding and ongoing litigation around DCG... and they likely need to attempt to take that into account in one direction or another, which could cause some uncertainties in terms of approving Grayscale.. .. so surely there remains ongoing uncertainties regarding how the SEC might end up playing these various matters in light of a variety of deadlines... and they likely already have some ideas where they want to go.. but then various court rulings do have to be taken into account and sometimes even some of the new applications that relate to Ethereum products (not wanting to necessarily consider that the shitcoins are any kind of a major factor even though, we cannot always know how the SEC might relate these various products, litigations and applications in order to justify what it is that they are doing, what they are saying they are doing and/or planning to do)

[franky1]

SEC wil wait for the appeals court to release guideance on what is an what is not an acceptable reason to decline, so they can use that specific reason to decline grayscale again

I am having trouble with your expectations regarding what the Appeals court is going to be doing in its guidance.


They already told the SEC that it has failed to provide any kind of a reason and so therefore the Appeals court has told the SEC and the world that the SEC's failure to provide an any kind of a reason that is not arbitrary/capricious is insufficient.

Why would the guideline tell the SEC what a good reason might be?  That makes no sense.

to stop the SEC making up a random new reason thats not even policy just to say they gave a reason

its not just about that the SEC has to give A reason.. its about that reason has to be justified too(non arbitrary)

[bbc.reporter]

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

Yes, as I have said, it might be good for the followers of this thread to have something similar to the wall observer thread where you update the information on GBTC's percentage on net asset value vs. bitcoin.

I reckon an update twice a month might be enough. This would certainly open much discussion and speculation. It might also help some people to know when to buy bitcoin hehehe.

[odolvlobo]

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

Yes, as I have said, it might be good for the followers of this thread to have something similar to the wall observer thread where you update the information on GBTC's percentage on net asset value vs. bitcoin.

You can see it here: GBTC Discount or Premium to NAV

[fillippone]

You can see it here: GBTC Discount or Premium to NAV

That graph is basically all you need.
Regarding timing, it is still uncertain, but I guess the first date is the one in mid October, then there us a bunch of deadlines.
Bloomberg analysts Balchunas and team have been pointing to that date.

[franky1]

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

Yes, as I have said, it might be good for the followers of this thread to have something similar to the wall observer thread where you update the information on GBTC's percentage on net asset value vs. bitcoin.

I reckon an update twice a month might be enough. This would certainly open much discussion and speculation. It might also help some people to know when to buy bitcoin hehehe.

instead of spamming topics. might be worth having a headliner in the topic first post that updates regularly. with a link that takes them to page #xx of this topic to continue discussion

as for when to buy bitcoin.. the GBTC speculates on the spot. not the other way round. so its better to just look at spot speculation first not GBTC first when making actual bitcoin purchase decisions

[fillippone]

the GBTC speculates on the spot.

I am sure you are well aware of this frankly, but to avoid any confusion, I remind everyone that GBTC hasn’t been purchasing any bitcoin for a few years. All the GBTC trading you see on the screens doesn’t move any single bitcoin. That’s a secondary market of existing fund’s shares. Only the creation/disruption of such shares would imply a movement in GBTC’s assets.

[bbc.reporter]

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

Yes, as I have said, it might be good for the followers of this thread to have something similar to the wall observer thread where you update the information on GBTC's percentage on net asset value vs. bitcoin.

You can see it here: GBTC Discount or Premium to NAV

The discount is only presently 18% now from an all time low of 48%. Premium all time high was on 47%. It appears that there will be some people who will profit handsomely from this when Grayscale ETF is approved. I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

[odolvlobo]

I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Probably not. Typically, only "authorized participants" can redeem shares for assets or deposit assets for shares and the transaction size is generally very large. For example, a GLD authorized participant exchanges 100,000 shares at a time, worth about $18 million.

[a298b112]

The discount is only presently 18% now from an all time low of 48%. Premium all time high was on 47%. It appears that there will be some people who will profit handsomely from this when Grayscale ETF is approved. I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Is there enough BTC for every GBTC? That is the question!

[fillippone]

Is there enough BTC for every GBTC? That is the question!

Of course, the answer is yes.
Every share in the Trust is backed by the corresponding amount of BTC (via entitlement).
So even if hypothetically every single GBTC holder would ask for conversion (something it is not possible as per @odolvlobo explanation, not a single Bitcoin would be traded in the market.

[franky1]

I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Probably not. Typically, only "authorized participants" can redeem shares for assets or deposit assets for shares and the transaction size is generally very large. For example, a GLD authorized participant exchanges 100,000 shares at a time, worth about $18 million.

most ETF are organised where "agents" (darkpools) are managers of an allotment(basket) of coin held in custody of the ETF service where they manage the shares to sell to customers

for a customer to redeem btc from the custodian, they would need to (maybe along with other customers) accumulate enough shares to equal the 'btc basket' amount..  to then vote to unlock the btc basket from custody. usually these btc baskets are in lumps of 1000+ coins per basket

[fillippone]

I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Probably not. Typically, only "authorized participants" can redeem shares for assets or deposit assets for shares and the transaction size is generally very large. For example, a GLD authorized participant exchanges 100,000 shares at a time, worth about $18 million.

most ETF are organised where "agents" (darkpools) are managers of an allotment(basket) of coin held in custody of the ETF service where they manage the shares to sell to customers

for a customer to redeem btc from the custodian, they would need to (maybe along with other customers) accumulate enough shares to equal the 'btc basket' amount..  to then vote to unlock the btc basket from custody. usually these btc baskets are in lumps of 1000+ coins per basket

I cannot remember on the top of my head, but I think, given the peculiar qualities of the Bitcoin, you can ask for the delivery of a very small quantity of coins. Of course, there is a hefty one-off fee that discourages that, but I nevertheless believe conversion is easier for GBTC (when applicable) than a traditional ETF.
The point is that at the moment, the possibility is precluded, as the primary market is closed.

[franky1]

 i have read too many different filings for different companies but they are all similar
anyways a quick search on one of greyscales..

old filing info..
https://www.sec.gov/Archives/edgar/data/1588489/000156459020038402/gbtc-10q_20200630.htm#NOTES_TO_UNAUDITED_FINANCIAL_STATEMENTS

Authorized Participants of the Trust are the only entities who may place orders to create or, if permitted, redeem Baskets. Genesis Global Trading, Inc. (“Genesis” or the “Authorized Participant”), a registered broker-dealer and wholly owned subsidiary of DCG, is the only Authorized Participant and is party to a participant agreement with the Sponsor and the Trust. Additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor.

..
The transfer agent for the Trust (the “Transfer Agent”) is Continental Stock Transfer & Trust Company. The responsibilities of the Transfer Agent are to maintain creations, redemptions, transfers, and distributions of the Trust’s Shares which are primarily held in book-entry form.

basically old filing is customers have to accumulate enough shares to equal a basket and collectively vote to (then genesis) to redeem back the BTC equivalent but (then genesis) have to make this request to "Continental Stock Transfer & Trust Company" who would process the shares back and destroy them. and make a btc withdrawal request via grayscale to coinbase..

(a shell of a shell of a shell to avoid any individual of DCG of having any liability)
usually other ETF's have the transfer agent being the authorised party.. and no, before you ask authorised parties are not end-customers. they are middlemen

knowing there are redemption fees and time/organisation for people to try to gather a basket.. its much easier for customers to just sell a share when spot market prices are equal to ETF prices. and then take that fiat and just buy btc on a proper spot market

[Daltonik]

Grayscale Investments announces that they have filed with the SEC a registration application on Form S-3 for the registration of shares of Grayscale Bitcoin Trust (OTCQX: GBTC) the application is submitted one day before the issuance of the judicial mandate by the Court of Appeals of the DC.

https://www.grayscale.com/blog/legal-topics/gbtcs-s-3-filing-explained

If I understand correctly, this is a new application in a simplified form as part of an attempt to convert Grayscale Bitcoin Trust into a spot bitcoin ETF.

[franky1]

Grayscale Investments announces that they have filed with the SEC a registration application on Form S-3 for the registration of shares of Grayscale Bitcoin Trust (OTCQX: GBTC) the application is submitted one day before the issuance of the judicial mandate by the Court of Appeals of the DC.

https://www.grayscale.com/blog/legal-topics/gbtcs-s-3-filing-explained

If I understand correctly, this is a new application in a simplified form as part of an attempt to convert Grayscale Bitcoin Trust into a spot bitcoin ETF.

it seems to me in the 7 day period(DCG said there was a 7 day period of discussion/answer seeking) after appeal deadline SEC and grayscale have been communicating about issues with the application, and it seems grayscale got some advice from SEC as to some of the hindrances

imagine if all the drama of rejections all along was grayscale filing using the wrong form.. if they get accepted via the new form. watch all the other companies rush to file on that same form using grayscale as the template model to fast approval. (for applicants that filed a few years ago)