Grayscale Investments, a company that specializes in managing digital currency assets, recently announced its plan to turn its flagship Grayscale Bitcoin Trust (GBTC) fund into an exchange-traded fund, or ETF. Even though the crypto winter is still going on, shareholders are worried, and there are problems with regulations, Grayscale is moving forward with its plans.
Since the beginning of this year, GBTC’s share price has been on a slow but steady downward trend, as the company trades in less liquid over-the-counter markets. As of Tuesday, the trust’s shares represented a 43% discount relative to the underlying value of bitcoin.
Fir Tree Capital Management has filed a lawsuit alleging “potential mismanagement and conflicts of interest” at GBTC, and is seeking to prevent Grayscale from converting GBTC into an ETF. However, Grayscale remains committed to its plans. “We strongly believe this is the best long-term product structure for GBTC and its shareholders,” a Grayscale spokesperson told Bloomberg.
Grayscale’s plans come at a time when the overall cryptocurrency market is struggling, with the value of the market declining by $1.3 trillion in 2022, as of early December. Because of this, a number of analysts are beginning to question whether or not crypto assets are a good long-term investment.
“Invest:NYC 2019 Michael Sonnenshein Managing Director Grayscale Investments” by CoinDesk is licensed under CC BY 2.0.
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