Grayscale Investments, the child company of Barry Silbert’s Digital Currency Group, filed an S-1 registration statement with the Securities and Exchange Commission (SEC) to list its Bitcoin Investment Trust on the New York Stock Exchange.
Since 2013, Grayscale Investment’s Bitcoin Investment Trust has been providing a unique method for investors and traders to purchase Bitcoin in a more regulated ecosystem by selling the shares of Bitcoin Investment Trust, hereinafter GBTC, on a public stock market. Each share represents one-tenth of Bitcoin price.
GBTC always shows a significantly large premium in comparison to the trading price of Bitcoin on global Bitcoin exchanges such as Kraken or Bitfinex. Currently, one share of GBTC is being traded at $117, effectively selling one Bitcoin for $1170, at a premium of $255 or nearly 22 percent.
High profile investors and traders are willing to purchase Bitcoin even with such a premium because with GBTC, they don’t have to be concerned about the security of a Bitcoin wallet service provider or the status of their Bitcoin. Investors can simply rely on GBTC to manage and handle their Bitcoins.
For some, it is not permitted to purchase assets like Bitcoin without going through a heavily regulated channel like the stock market. For these traders, regulated channels are the only practical way to obtain the digital currency.
GBTC Files With SEC to Offer Bitcoin ETF
The goal of Grayscale Investments is to treat GBTC like a traditional Bitcoin ETF instead of a publicly traded stock market asset. For the company to transform GBTC to an ETF it has to undergo the same approval process the Winklevoss Twins and SolidX have gone through, which is a multi-year procedure involving hefty capital and resources.
To optimize or fasten the approval process Grayscale Investments is set to bring in two Wall Street firms KCG Holdings and Wedbush Securities, to oversee the proposal and serve as authorized participants. The S-1 filing also stated that Bank of New York Mellon will serve as the transfer agent.
“The investment objective of the Trust is for the Shares to reflect the performance of the value of a Bitcoin as represented by the Index, less the Trust’s liabilities and expenses. The Shares are designed to provide investors with a cost-effective and convenient way to invest in Bitcoin. Grayscale Investments LLC is the sponsor of the Trust, Delaware Trust Company is the trustee of the Trust, The Bank of New York Mellon is the transfer agent of the Trust and the administrator of the Trust and Xapo Inc. is the custodian of the Trust.”