Grayscale Contemplates Refunding Shareholders 20% of its $10B Value

• GBTC thinks about returning capital to shareholders as it fails to convert to ETF.
• The CEO said a tender offer for up to 20% of the outstanding shares is possible.
• In June, US SEC rejected Grayscale’s proposal to convert to ETF.

The publicly traded investment vehicle, Grayscale Bitcoin Trust (GBTC), is contemplating new options to refund shareholders’ capital if it fails to transform into an exchange-traded fund (ETF).

According to Wall Street Journal, GBTC CEO Michael Sonnenshein wrote to inventors that these options could include a tender offer for up to 20% of the outstanding shares of the $10.7 billion trust. The company believed converting from GBTC to an ETF would help bring its share price to trade in line with its underlying value.

According to data from the market tracking site CoinGlass, the GBTC premium rate plunged to a record negative 48.7%, with a significant 30-day change of negative 969.  Contextually, the premium rate refers to the difference between the value of the assets held by the trust against the market price. These figures put the Bitcoin trust in terrible condition since this year, given the global market downturn.

In June this year, the US Securities and Exchange Commission (SEC) declined Grayscale’s proposal to convert to a spot Bitcoin exchange-traded fund (ETF). The SEC decided this after GBTC’s committee failed to answer critical questions concerning preventing market manipulation and investor protection. Although Grayscale revealed, in an investor’s letter, that in a public survey the SEC conducted from the previous year, 99.96% of the respondents supported Grayscale’s case.

In other news, the crypto market continues the bleeding cycle as the global market cap moves towards dropping below the $800 billion price point. Bitcoin (BTC) currently trades at $16,751.72, barely attaining a percentage increase in the last 24 hours.