Grayscale Investments, sponsor of the largest Bitcoin investment vehicle and the world leader in crypto investing with over $2 billion in assets under management, has announced that the Grayscale Bitcoin Trust is now registered with the U.S. Securities and Exchange Commission as a reporting company.
The landmark achievement pushes Bitcoin one step further into the traditional financial markets, gaining regulatory oversight as the digital asset emerges from the shadows of Silk Road and lands in the portfolios of Wall Street investors. The top US securities regulator will now require Grayscale to file quarterly and annual reports as well as submit audited financial statements.
As the first crypto index fund to become an SEC reporting company, the Grayscale Bitcoin Trust is well positioned to draw more institutional and accredited investors. It offers investors exposure to BTC without having to hold the cryptocurrency directly in their portfolios. The Trust, which is solely and passively invested in Bitcoin, is tied to the performance of Bitcoin.
“As many institutions restrict investments in instruments that are not registered with the SEC, a broader set of investors may now begin to consider the Trust accordingly.”
Commenting on how the new SEC status should be construed, Grayscale adds,
“We want to be clear that this voluntary process to classify the Trust as an SEC reporting company is not and should not be confused as an effort to classify the Trust as an ETF. Our products are not ETFs, but they do have a familiar structure to investors because they’re modeled after popular commodity investment products.”
Industry insiders are weighing, however, how the new reporting status might influence the SEC’s attitudes toward a Bitcoin exchange-traded fund.
Ryan Selkis, founder of crypto data research firm Messari, calls Grayscale’s latest maneuver a savvy regulatory signal. He expects the SEC to offer its first official approval of a Bitcoin ETF within the next 12 to 18 months.
I think we'll finally see a Bitcoin ETF in the next 12-18 months and it will be @GrayscaleInvest that gets the nod.
— Ryan Selkis (@twobitidiot) January 22, 2020
Selkis writes in a note to investors,
“All that’s left really is for the SEC to finally recognize that this quasi-public vehicle is already available, liquid, and widely coveted by retail investors, while at the same time, the Commission’s own foot-dragging on an ‘official’ ETF approval is quantifiably hurting those same investors by perpetuating the premium that exists on the publicly floated shares.”
Grayscale’s 2019 report confirms that the company’s record fourth quarter in 2019 shows a sustained high demand among institutional investors for its suite of cryptocurrency products.
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