Grayscale's Application for BTC Spot ETF Progress: Will BTC Face Significant Selling Pressure？

Bloomberg ETF analyst James Seyffart, in a post on the X platform, stated that Grayscale has submitted a new S-3/prospectus for the conversion of GBTC to an ETF. The most significant update is the plan to change the code from GBTC to BTC. This confirms that Grayscale is in negotiations with the SEC and has updated/modified its product documentation after discussions and feedback from the SEC.

Previously, James Seyffart mentioned that Grayscale had a meeting with the SEC's Division of Trading and Markets, which is responsible for approving or disapproving 19b-4 filings, the day before. There are rumors that other potential Bitcoin spot ETF issuers have also met with the SEC in the past week.

In terms of news, there have been developments in Grayscale's application for a BTC spot ETF. The GBTC negative premium rate has narrowed to 9.78%, falling below 10% for the first time since July 2021.

GBTC stands for Grayscale Bitcoin Trust, a financial product provided by Grayscale. This trust fund allows investors to indirectly invest in Bitcoin by purchasing its shares. Grayscale holds Bitcoin and allows investors to indirectly hold the value of Bitcoin through the issuance of GBTC shares. This structure enables investors who do not wish to directly buy and hold Bitcoin to participate in Bitcoin investments.

Due to the current lack of redemption support for GBTC, there is often a premium or discount between GBTC and BTC prices. For the

cryptocurrency

market, the BTC held by Grayscale is considered locked, and for Grayscale, the lack of redemption support restricts the development of GBTC.

Since the beginning of this year, traders have been purchasing shares of the Grayscale Bitcoin Trust (GBTC), and these shares have been trading at a price lower than the potential value of the Bitcoin it holds. This is likely in the hope of profiting from the price difference when it converts to a physically-backed Bitcoin ETF. This suggests that many GBTC traders may seek to cash out during its ETF conversion. Taking this into consideration, analysts at JPMorgan have examined the inflows into GBTC since 2023 to estimate the value of shares that might be sold during the conversion. They estimate this figure to be around $2.7 billion.