Grayscale gears up for legal battle with SEC over Bitcoin ETF

March 29, 2022 Coin Telegraph

bitcoin etf

“I think all options are on the table,” said the Grayscale CEO, adding that the company has put its “full resources” into converting its flagship Bitcoin trust.

Grayscale CEO Michael Sonnenshein said the firm is gearing up for a legal fight if Grayscale’s Bitcoin Spot ETF product is denied by the United States Securities and Exchange Commission (SEC).

In an interview with Bloomberg on Tuesday, March 29, Sonnenshein was asked if he would consider the Administrative Procedure Act (APA) lawsuit option if the application for its Bitcoin Spot ETF was denied by the financial regulator.

“I think all options are on the table,” he responded, highlighting the importance of continuing to advocate for investors. The next decision date for the approval or denial of the investment product is July 6, 2022, it was previously delayed in February, and was originally filed in October 2021.

“The Grayscale team has been putting the full resources of our firm behind converting GBTC, our flagship fund, into an ETF. It’s really important that investors know that we have and will continue to advocate for them.”

Grayscale announced in October 2021 that it was planning to convert its Bitcoin Trust, GBTC to a Bitcoin (BTC)-settled ETF. The SEC delayed a decision to approve the product in December 2021, citing that a longer period was needed to consider the proposed changes, their action was repeated in February.

The SEC opened the changes proposed by Grayscale to public feedback. The feedback received by the regulator showed that 95% of respondents were in support of the conversion, according to an analysis taken in February. Grayscale dedicated a portion of its website to encouraging investors to submit comments to the SEC.

“GBTC today is owned by investors in all 50 states, and there are actually now over 800,000 accounts in the U.S. all waiting patiently to have it converted into an ETF,” Sonnenshein said.

“It was really a very exciting announcement that we now have Bitcoin futures ETFs out in the market, but unfortunately, that's forced investors into those Bitcoin futures products, because those are the only ones that exist.”

Sonnenshein added that Grayscale was encouraged by the SEC’s support for crypto exchanges in registering with the regulator, as well as President Biden’s recent executive order on crypto.

“Ultimately, we believe it's a matter of when, not a matter of if a spot Bitcoin ETF is approved.”

Grayscale Investments Asks Investors to Help Convince SEC to Approve Bitcoin Spot ETF

February 22, 2022 Bitcoin.com

Bitcoin Treasuries List Claims 59 Companies and a Handful of Countries Hold 1.49 Million BTC

December 31, 2021 Bitcoin.com

El Salvador to build 20 ‘Bitcoin Schools’ with surplus from Bitcoin Trust

November 3, 2021 Coin Telegraph

bitcoin trust

The government will use the “surplus” from its Bitcoin Trust account that currently contains 1,120 BTC.

The government of El Salvador is embarking on its next Bitcoin-related project which involves building schools using profits the nation has made on the asset.

Profits or the “surplus” from the state’s Bitcoin Trust account will be channeled into the construction of 20 schools according to President Nayib Bukele. On Nov. 2, the Press Secretary of the Presidency tweeted:

“When this project was started, we had not made as much money in FIDEBITCOIN [state BTC Trust account] as we have made now. So we have decided to make the first 20 Bitcoin Schools.”

Bukele’s spokesperson also stated that profits from previous BTC purchases will go towards benefiting the people and no Salvadoran taxes will be touched for the new project.

Local media reported that the construction of the 20 new schools will support the expansion of cryptocurrency education for locals and be part of the 400 schools planned for the “My New School” program. In October 2020, the Central American Bank for Economic Integration (CABEI) approved the financing of $200 million to El Salvador for the education expansion incentive.

In mid-October, the President announced that the government will spend $4 million from the Bitcoin Trust to construct a new veterinary hospital in the capital San Salvador.

El Salvador’s controversial Bitcoin Law officially came into effect on Sept. 7, but its inaugural day of legal tender status was marred by technical glitches with the state Chivo wallet.

On Oct. 28, Cointelegraph reported that El Salvador purchased a further 420 BTC bringing its total stash to 1,120 BTC. At current prices of $63K, this is worth around $70.5 million.

El Salvador BTC, a Twitter feed tracking the nation’s Bitcoin purchases, reported that $12 million in profit has been made so far, based on an average purchase price of $53,062.

Those 1,120 #BTC that @nayibbukele and @PresidenciaSV have purchased for El Salvador at an average price of $53,062, worth $59.43 million at the time of purchase, are now worth $71.42 million
— ElSalvadorBTC (@ElSalvadorBTC_) November 2, 2021

The account also tracks the $30 stimulus handout that the government gave to citizens to encourage the adoption of Bitcoin. The $30 in BTC given to Salvadorans on July 9 is now worth around $38, the tracker reported on Nov. 2. Anthony Pompliano's brother Joe commented:

“More citizens now have Bitcoin wallets than traditional bank accounts, and for the first time in their life, they have seen their purchasing power appreciate by more than 30%. This is a fascinating experiment.”

Grayscale Confirms Plan to Convert GBTC Into Bitcoin ETF

October 18, 2021 Bitcoin.com

El Salvador to build $4M veterinary hospital using profits from Bitcoin trust

October 11, 2021 Coin Telegraph

bitcoin trust

Salvadoran president Nayib Bukele said no Bitcoin will be sold to fund the investment, with the state instead drawing USD from its Bitcoin trust.

Salvadoran president Nayib Bukele has announced plans to invest part of the $4 million worth of profits the country has amassed from its Bitcoin holdings to invest into constructing a new veterinary hospital in the local capital of San Salvador.

Taking to Twitter on Oct. 10, Bukele revealed that El Salvador’s state-operated Bitcoin trust currently holds $4 million worth of profits gleaned from its recent Bitcoin embrace.

Bukele announced that part of the funds will be invested into constructing a veterinary hospital featuring four operating rooms, four emergency clinics, 19 offices, and a rehabilitation area. “We decided to invest a part of that money in this: a veterinary hospital for our furry friends,” he said.

Bukele added the facility will aim to be able to perform 64 surgeries, respond to 128 emergencies, and tend to nearly 400 general appointments daily, sharing a computer-generated mock-up of the hospital to social media.

Así que decidimos invertir una parte de ese dinero en esto:

UN HOSPITAL VETERINARIO para todos nuestros peluditos. Que incluirá:

12 Consultorios básicos
4 Consultorios de emergencia
4 Quirófanos
Área de rehabilitación
Aislamientos
Hospitalizaciones
Recuperación

Sigue... pic.twitter.com/Puq6bRb2Ob
— Nayib Bukele (@nayibbukele) October 10, 2021

The news was met with mixed reactions on Twitter, with many Salvadorans suggesting alternative uses for the country’s crypto profits.

According to a rough translation, Twitter user Norma De Serrano said it would be better for the money to be invested in improving the existing medical facilities across the country, emphasizing that many hospitals and health units “need to be improved” — with many other commenters expressing similar concerns.

Others criticized the government for failing to invest in infrastructure outside of the country’s capital.

The news comes as Bitcoin’s market capitalization recently broke above $1 trillion for the first time since May, with BTC rallying nearly 20% from $47,000 to more than 55,000 during the past week.

Weekly roundup: Ark Invest, Edge Wealth Management, and Rothschild Investment accumulate crypto

July 23, 2021 Coin Telegraph

Asset Management

Cathie Wood's Ark Invest purchased more than 450,000 GBTC shares in two separate buys this week.

As the price of Bitcoin returned to more than $32,000 this week, some major firms announced they had increased their exposure to cryptocurrencies through Grayscale’s crypto trusts.

According to a Friday filing with the U.S. Securities and Exchange Commission, or SEC, New York-based investment firm Edge Wealth Management currently holds 54,134 shares of Grayscale’s Bitcoin Trust (GBTC), valued at $27.13 at the time of publication, and 25,280 shares of the company’s Ethereum Trust (ETHE). The crypto holdings are worth almost $2 million at $1,468,655 and $466,668, respectively, roughly 0.3% of the $703 million total assets under management the company reported on Feb. 2.

Grayscale’s crypto trusts are not new investment opportunities for Edge. The investment firm held 37,605 GBTC and 17,300 ETHE shares in April, representing increases of 44% and 46%, respectively.

Some institutions’ exposure to Bitcoin (BTC), Ether (ETH), and other cryptocurrencies through Grayscale have increased as digital currencies seemingly play a larger role in the global economy. Similar filings with the SEC show Rothschild Investment Corp quadrupled its exposure to Bitcoin through Grayscale, owning 38,346 GBTC shares in April and 141,405 GBTC as of June 30. With a reported more than $1 billion in assets under management as of April 8, the Bitcoin trust shares represent less than 0.09% of the investment firm’s holdings.

However, Cathie Wood's Ark Invest is continuing to purchase GBTC shares at higher rate than the two aforementioned companies. This week, the investment firm reported it purchased more than 450,000 shares of Grayscale Bitcoin Trust in two separate buys, bringing its combined holdings to more than 9 million shares, or roughly 0.5% of its portfolio. At its peak in March, GBTC represented 0.9% of Ark’s portfolio.

“The investment community continues to express interest in the digital currency asset class, and the crypto ecosystem more broadly, and as these assets gain mainstream adoption, we anticipate investors will seek new ways to access digital currencies to further diversify their portfolios,” said Grayscale CEO Michael Sonnenshein in a letter to investors.

The reports of GBTC purchases come the same week Grayscale unlocked 16,240 BTC worth of its Bitcoin Trust shares after six months. Though there was some speculation the price of the crypto asset could be adversely affected by such a large release in a single day, BTC saw a roughly 2.9% increase in price week-over-week and reached $32,457 at the time of publication.

bitcoin trust