Grayscale's court case against the Securities and Exchange Commission for a bitcoin ETF starts this week.
The years-long push for an exchange traded fund that tracks bitcoin will finally get its day in court this week. Several different firms tried to bring a spot bitcoin ETF to market in the U.S. without success, but Grayscale Investments is taking it a step further for the future of its Grayscale Bitcoin Trust . After Grayscale's proposal to convert the trust to an ETF was rejected last June, the firm sued the U.S. Securities and Exchange Commission in the D.C. Circuit Court of Appeals.
The trust does not currently have a redemption mechanism, which means that professional investors can't do arbitrage trades to keep the fund closer in line with the price of bitcoin. This also means that the underperformance of the shares turn into a large discount for the shareholders. The fund was trading at nearly 50% below the value of the assets it holds last week, according to crypto news site The Block .
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