The clock is ticking on a limited-time offer to get bitcoin on the cheap. Whether it turns out to be a bargain or a bad deal depends on the actions of an intransigent regulator.
By Steven Ehrlich, Forbes Staff
After more than two years of unintentionally offering a way to buy bitcoin for less than its market price (sometimes a lot less), the world’s most popular cryptocurrency investment fund is advancing in an attempt to change its format—thanks to a court victory that could provide an overnight bonanza to investors. Logically, the question should be more when, than if, the $16 billion Grayscale Bitcoin Trust (GBTC ) will transform into an exchange-traded fund from its current restrictive format. But it is not entirely clear that the U.S. Securities and Exchange Commission is ready to abandon a position that stands in the way of that change.
Right now, GBTC units trade at $19.26 but represent a claim on $23.33 worth of bitcoin. The trust, similar to a closed-end mutual fund, can change hands above or below its net-asset value (NAV), allowing investors to place a premium or discount on the value of its holdings. The design allows institutional and wealthy individual investors to buy fund shares at the NAV, and in previous years this provided a perverse incentive for it to trade at a premium that reached as high as 100% and spent most of 2019 to 2021 at about 30%.
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