Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 9.

franky1

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Quote from: fillippone on October 28, 2023, 10:13:03 AM

Quote from: franky1 on October 28, 2023, 03:51:17 AM

i know some will say ARK21 deadline in january is closer than blackrocks march deadline. but the SEC can do another delay on ark and favour to give 'first mover' to blackrock on or before march

I doubt the SEC won’t pick all the issuers at the same time.
Not only they won’t pick a winner, but as well they will be careful not to pick a loser. This would expose them to a huge legal risk for so much money that they could destroy the reputation of SEC.
So, I don’t know when it happens, but when this happen it will be for all of the issuers.

nope. each application has different review/deadline dates..
however you are right the SEC do not want to make a mistake of accepting the wrong candidate first as it can put huge legal risk back on the SEC
which is more reason to not blanket accept all at same time

this legal risk is another reason why non-experienced grayscale vs for instance very ETF experienced blackrock. gives more weight to blackrock winning.

blackrock already have the platform and technical communication ISO standards to nasdaq platform. where for blackrock its just adding another asset to its system. however grayscale with no nasdaq experience has to create the platform, conform to ISO communication standards with nasdaq and set up alot of legal compliance frame work for the first time.. its not a case of just adding an asset to nasdaq for grayscale, there is alot more to it to show experience of compliance and readiness.

i believe there would be a first mover advantage. followed by other applicants adjusting/editing their applications to be templates of the blackrock application to then "fast track" their acceptances

fillippone

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Quote from: franky1 on October 28, 2023, 03:51:17 AM

i know some will say ARK21 deadline in january is closer than blackrocks march deadline. but the SEC can do another delay on ark and favour to give 'first mover' to blackrock on or before march

I doubt the SEC won’t pick all the issuers at the same time.
Not only they won’t pick a winner, but as well they will be careful not to pick a loser. This would expose them to a huge legal risk for so much money that they could destroy the reputation of SEC.
So, I don’t know when it happens, but when this happen it will be for all of the issuers.

franky1

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Quote from: fillippone on October 26, 2023, 04:30:01 AM

This is peanut amount for ARK, probably a take profit for one of their junior portfolio manager.
The bulk of the position stay still, and probably will do until conversion. Speaking of which, I do disagree with your position. I was fascinated by this possibility in the last, but recent development in the saga made me think it won't happen in the end.

the way i see it. due to the legal stuff of grayscale. the application review process stopped for them months ago. however the application reviews of things like blackrock continued. now the SEC has been asked to re-review grayscale. they are at the bottom of the pile(back at the start)

grayscale recently submitted its promotional material and prospectus pamphlets to the SEC to show their wording is not misleading. but this is not a sign of them being a stage closer than other applicants, it shows the SEC is scrutinising the small print and terms more

with the added stuff of the bankruptcy's/debts of grayscale sister companies, and lack of documented experience in the ETF industry, also does not add positive weight to their review. where as blackrocks long history does add positive weight to blackrocks review

i know some will say ARK21 deadline in january is closer than blackrocks march deadline. but the SEC can do another delay on ark and favour to give 'first mover' to blackrock on or before march

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Quote from: franky1 on October 26, 2023, 03:01:16 AM

Quote from: fillippone on October 23, 2023, 06:58:44 PM

another day, another record:

and with this, ARK sold 100k of shares monday and 70k of shares tuesday to get out some profit
its only a $few million, but still

i personally dont see grayscale getting accepted before blackrock. looking at the legal issues of other DCG drama. the SEC is not confident with DCG compared to blackrock

This is peanut amount for ARK, probably a take profit for one of their junior portfolio manager.
The bulk of the position stay still, and probably will do until conversion. Speaking of which, I do disagree with your position. I was fascinated by this possibility in the last, but recent development in the saga made me think it won't happen in the end.

franky1

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Quote from: fillippone on October 23, 2023, 06:58:44 PM

another day, another record:

and with this, ARK sold 100k of shares monday and 70k of shares tuesday to get out some profit
its only a $few million, but still

i personally dont see grayscale getting accepted before blackrock. looking at the legal issues of other DCG drama. the SEC is not confident with DCG compared to blackrock

franky1

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so the appeal happened.
the deadline to appeal happened
the 7 day consultation period happened

and now the courts finally release the mandate formalising the court decision
https://storage.courtlistener.com/recap/gov.uscourts.cadc.38827/gov.uscourts.cadc.38827.1208564168.0_1.pdf

now the SEC has to officially reconsider grayscale application

fillippone

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another day, another record:

11% discount wasn't seen on the NAV discount since Aug '21.

The optimism on the SEC trial has been overwhelming since the agency didn't appeal the court, which has already taken the discount skyrocketing toward 0%.
Ideally, on ETF conversion date this discount should evaporate. Hence the sentiment is very positive and still grinding north. A lot of traders are shorting spot instruments (from futures, to spot itself or even strange things like Microstrategy).
THis is definitely an easy trade for the trading community.

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Quote from: franky1 on October 20, 2023, 12:09:59 AM

Quote from: Daltonik on October 19, 2023, 12:34:16 PM

Grayscale Investments announces that they have filed with the SEC a registration application on Form S-3 for the registration of shares of Grayscale Bitcoin Trust (OTCQX: GBTC) the application is submitted one day before the issuance of the judicial mandate by the Court of Appeals of the DC.

https://www.grayscale.com/blog/legal-topics/gbtcs-s-3-filing-explained

If I understand correctly, this is a new application in a simplified form as part of an attempt to convert Grayscale Bitcoin Trust into a spot bitcoin ETF.

it seems to me in the 7 day period(DCG said there was a 7 day period of discussion/answer seeking) after appeal deadline SEC and grayscale have been communicating about issues with the application, and it seems grayscale got some advice from SEC as to some of the hindrances

imagine if all the drama of rejections all along was grayscale filing using the wrong form.. if they get accepted via the new form. watch all the other companies rush to file on that same form using grayscale as the template model to fast approval. (for applicants that filed a few years ago)

Greyscale premium is hovering toward recent minimums:

Optimism about Grayscale conversion is making the fund's share constantly bid.
To me, the risk-reward in the trade starts being neutral. Yes, we are close to the finish line, but we are discounting every possible positive news. Even a blip in the road to conversion can scare the investors (who are not pretty in the money in the trade, I would say, and make the discount widen again.

franky1

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Quote from: Daltonik on October 19, 2023, 12:34:16 PM

Grayscale Investments announces that they have filed with the SEC a registration application on Form S-3 for the registration of shares of Grayscale Bitcoin Trust (OTCQX: GBTC) the application is submitted one day before the issuance of the judicial mandate by the Court of Appeals of the DC.

https://www.grayscale.com/blog/legal-topics/gbtcs-s-3-filing-explained

If I understand correctly, this is a new application in a simplified form as part of an attempt to convert Grayscale Bitcoin Trust into a spot bitcoin ETF.

it seems to me in the 7 day period(DCG said there was a 7 day period of discussion/answer seeking) after appeal deadline SEC and grayscale have been communicating about issues with the application, and it seems grayscale got some advice from SEC as to some of the hindrances

imagine if all the drama of rejections all along was grayscale filing using the wrong form.. if they get accepted via the new form. watch all the other companies rush to file on that same form using grayscale as the template model to fast approval. (for applicants that filed a few years ago)

Daltonik

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Grayscale Investments announces that they have filed with the SEC a registration application on Form S-3 for the registration of shares of Grayscale Bitcoin Trust (OTCQX: GBTC) the application is submitted one day before the issuance of the judicial mandate by the Court of Appeals of the DC.

https://www.grayscale.com/blog/legal-topics/gbtcs-s-3-filing-explained

If I understand correctly, this is a new application in a simplified form as part of an attempt to convert Grayscale Bitcoin Trust into a spot bitcoin ETF.

franky1

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i have read too many different filings for different companies but they are all similar
anyways a quick search on one of greyscales..

old filing info..
https://www.sec.gov/Archives/edgar/data/1588489/000156459020038402/gbtc-10q_20200630.htm#NOTES_TO_UNAUDITED_FINANCIAL_STATEMENTS

Quote

Authorized Participants of the Trust are the only entities who may place orders to create or, if permitted, redeem Baskets. Genesis Global Trading, Inc. (“Genesis” or the “Authorized Participant”), a registered broker-dealer and wholly owned subsidiary of DCG, is the only Authorized Participant and is party to a participant agreement with the Sponsor and the Trust. Additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor.

..
The transfer agent for the Trust (the “Transfer Agent”) is Continental Stock Transfer & Trust Company. The responsibilities of the Transfer Agent are to maintain creations, redemptions, transfers, and distributions of the Trust’s Shares which are primarily held in book-entry form.

basically old filing is customers have to accumulate enough shares to equal a basket and collectively vote to (then genesis) to redeem back the BTC equivalent but (then genesis) have to make this request to "Continental Stock Transfer & Trust Company" who would process the shares back and destroy them. and make a btc withdrawal request via grayscale to coinbase..

(a shell of a shell of a shell to avoid any individual of DCG of having any liability)
usually other ETF's have the transfer agent being the authorised party.. and no, before you ask authorised parties are not end-customers. they are middlemen

knowing there are redemption fees and time/organisation for people to try to gather a basket.. its much easier for customers to just sell a share when spot market prices are equal to ETF prices. and then take that fiat and just buy btc on a proper spot market

fillippone

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Quote from: franky1 on September 20, 2023, 03:50:26 PM

Quote from: odolvlobo on September 19, 2023, 02:19:34 AM

Quote from: bbc.reporter on September 19, 2023, 12:29:30 AM

I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Probably not. Typically, only "authorized participants" can redeem shares for assets or deposit assets for shares and the transaction size is generally very large. For example, a GLD authorized participant exchanges 100,000 shares at a time, worth about $18 million.

most ETF are organised where "agents" (darkpools) are managers of an allotment(basket) of coin held in custody of the ETF service where they manage the shares to sell to customers

for a customer to redeem btc from the custodian, they would need to (maybe along with other customers) accumulate enough shares to equal the 'btc basket' amount.. to then vote to unlock the btc basket from custody. usually these btc baskets are in lumps of 1000+ coins per basket

I cannot remember on the top of my head, but I think, given the peculiar qualities of the Bitcoin, you can ask for the delivery of a very small quantity of coins. Of course, there is a hefty one-off fee that discourages that, but I nevertheless believe conversion is easier for GBTC (when applicable) than a traditional ETF.
The point is that at the moment, the possibility is precluded, as the primary market is closed.

franky1

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Quote from: odolvlobo on September 19, 2023, 02:19:34 AM

Quote from: bbc.reporter on September 19, 2023, 12:29:30 AM

I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Probably not. Typically, only "authorized participants" can redeem shares for assets or deposit assets for shares and the transaction size is generally very large. For example, a GLD authorized participant exchanges 100,000 shares at a time, worth about $18 million.

most ETF are organised where "agents" (darkpools) are managers of an allotment(basket) of coin held in custody of the ETF service where they manage the shares to sell to customers

for a customer to redeem btc from the custodian, they would need to (maybe along with other customers) accumulate enough shares to equal the 'btc basket' amount.. to then vote to unlock the btc basket from custody. usually these btc baskets are in lumps of 1000+ coins per basket

fillippone

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Quote from: a298b112 on September 19, 2023, 07:51:21 AM

Is there enough BTC for every GBTC? That is the question!

Of course, the answer is yes.
Every share in the Trust is backed by the corresponding amount of BTC (via entitlement).
So even if hypothetically every single GBTC holder would ask for conversion (something it is not possible as per @odolvlobo explanation, not a single Bitcoin would be traded in the market.

a298b112

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Quote from: bbc.reporter on September 19, 2023, 12:29:30 AM

The discount is only presently 18% now from an all time low of 48%. Premium all time high was on 47%. It appears that there will be some people who will profit handsomely from this when Grayscale ETF is approved. I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Is there enough BTC for every GBTC? That is the question!

odolvlobo

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Quote from: bbc.reporter on September 19, 2023, 12:29:30 AM

I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

Probably not. Typically, only "authorized participants" can redeem shares for assets or deposit assets for shares and the transaction size is generally very large. For example, a GLD authorized participant exchanges 100,000 shares at a time, worth about $18 million.

bbc.reporter

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Quote from: odolvlobo on September 10, 2023, 03:36:44 AM

Quote from: bbc.reporter on September 10, 2023, 02:09:42 AM

Quote from: fillippone on September 09, 2023, 07:58:51 AM

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

Yes, as I have said, it might be good for the followers of this thread to have something similar to the wall observer thread where you update the information on GBTC's percentage on net asset value vs. bitcoin.

You can see it here: GBTC Discount or Premium to NAV

The discount is only presently 18% now from an all time low of 48%. Premium all time high was on 47%. It appears that there will be some people who will profit handsomely from this when Grayscale ETF is approved. I assume holders of GBTC will be given a choice to convert their GBTC shares to bitcoin after approval?

fillippone

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Quote from: franky1 on September 10, 2023, 09:21:37 AM

the GBTC speculates on the spot.

I am sure you are well aware of this frankly, but to avoid any confusion, I remind everyone that GBTC hasn’t been purchasing any bitcoin for a few years. All the GBTC trading you see on the screens doesn’t move any single bitcoin. That’s a secondary market of existing fund’s shares. Only the creation/disruption of such shares would imply a movement in GBTC’s assets.

franky1

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Quote from: bbc.reporter on September 10, 2023, 02:09:42 AM

Quote from: fillippone on September 09, 2023, 07:58:51 AM

I guess the SEC will approve all of them, all at the same time.
Approving one of them before the other it will mean picking a winner, something the SEC isn’t clearly intended to do as they would be subject to an handful of potentially disruptive litigations.
So I guess Grayscale discount is a good indicator for all the ETF approvals.

Yes, as I have said, it might be good for the followers of this thread to have something similar to the wall observer thread where you update the information on GBTC's percentage on net asset value vs. bitcoin.

I reckon an update twice a month might be enough. This would certainly open much discussion and speculation. It might also help some people to know when to buy bitcoin hehehe.

instead of spamming topics. might be worth having a headliner in the topic first post that updates regularly. with a link that takes them to page #xx of this topic to continue discussion

as for when to buy bitcoin.. the GBTC speculates on the spot. not the other way round. so its better to just look at spot speculation first not GBTC first when making actual bitcoin purchase decisions

fillippone

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Quote from: odolvlobo on September 10, 2023, 03:36:44 AM

You can see it here: GBTC Discount or Premium to NAV

That graph is basically all you need.
Regarding timing, it is still uncertain, but I guess the first date is the one in mid October, then there us a bunch of deadlines.
Bloomberg analysts Balchunas and team have been pointing to that date.

Topic: Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 9. (Read 16372 times)