SEC Faces Potential Lawsuit From Grayscale Over GBTC Options Trading

Key Insights 

• Nate Geraci, President of ETF Store, speculated about the possibility of a looming lawsuit since Grayscale's letter to the SEC tags it as "unfair discrimination" against shareholders. 
• Grayscale's CEO emphasized the importance of allowing exchange-listed options on GBTC and other spot Bitcoin ETFs for the benefit of investors.
• The approval of spot Bitcoin ETFs has proven successful, leading to increased trading volume and Bitcoin accumulation.

Top cryptocurrency asset manager Grayscale Investment could be filing a lawsuit against the U.S. Securities and Exchange Commission (SEC) over the rejection of options trading for its Grayscale Bitcoin Trust (GBTC). Grayscale Investment made its intentions known through a letter forwarded to the SEC by Nate Geraci, President of the ETF Store.

Reasons Behind the Potential Lawsuit from Grayscale Investment 

According to Nate Geraci, Grayscale Investment sees the SEC's action towards shareholders as "unfair discrimination," leading to the possibility of legal action against the regulatory body. 

Additionally, Grayscale Investment needed equal treatment for its shareholders from the U.S. Securities and Exchange Commission (SEC). The asset management firm has been pushing the SEC to extend the option approval to its spot bitcoin ETF.

Grayscale Investment CEO Michael Sonnenshein stated that preventing Grayscale's Bitcoin Trust (GBTC) from offering options trading will put its investors at a disadvantage in the market. He added that such actions would halt the product's appeal to potential customers. 

In the past, the SEC gave the green light for options trading on ETFs linked to bitcoin futures. Grayscale, a major player in the crypto asset management space, believes this approval should extend to their product, GBTC. They argue that allowing options on GBTC would improve price discovery, make navigating the market easier, and provide investors with better hedging strategies.

Grayscale's CEO, Sonnenshein, has been vocal about the need to create a robust market for options on spot Bitcoin ETFs. He highlights the fact that options for bitcoin futures ETFs were available almost immediately after trading started.

However, spot Bitcoin ETFs are facing delays in regulatory approvals, leading to an imbalance in treatment between futures and spot Bitcoin ETFs. Sonnenshein emphasizes that options would benefit all investors and hopes to see progress in this area soon.

Bitcoin ETF Battle: BlackRock Surge Passes Grayscale in Trading Volume

In similar news, BlackRock's product, iShares Bitcoin Trust (IBIT), has recorded more transactions in terms of trading volume compared to the GBTC.

Per the Bloomberg Intelligence report, IBIT has over a $40 million edge over GBTC. Recent data released earlier this year shows iShares Bitcoin Trust (IBIT) with a massive trading volume of $219.3 million, while GBTC is recording $181.7 million. 

For a while now, investors have been worried about Grayscale's outflows. They've been selling off a lot of their bitcoin, about 5,086 BTC, which is worth around $218 million. 

But in the bigger picture, things are starting to look up. Eight ETFs, including big players like Fidelity, have been adding Bitcoin to their holdings. Together, they've added 8,907 BTC, valued at roughly $382 million. Fidelity alone has contributed 5,422 BTC to this total. 

These inflows into different ETFs are helping to counter some of the negative sentiment that was pushing Bitcoin's price down below $40,000.

Conclusion 

The possible legal action between Grayscale and the SEC regarding GBTC options sheds light on the intricate legal issues and uncertainties surrounding cryptocurrency investments. It emphasizes the necessity for clear regulations to create a more stable environment for investors and institutions involved in the crypto market.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.