Grayscale CEO confirms tender offer if Bitcoin ETF path fails

Grayscale Investments will return 20% of the Grayscale Bitcoin Trust (GBTC) fund investors if its a place to bid bitcoin etf fails.

The company will explore this option now that the Securities and Exchange Commission (SEC) has approved its application to convert GBTC into a spot bitcoin ETF. This is the message Grayscale CEO Michael Sonnenshein gave investors at the end of the year Letter on Monday.

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SEC has rejected Grayscale’s proposal to turn GBTC into an ETF fizzled out already this year, with the regulator’s actions hitting the investment firm with a lawsuit.

On Monday, Sonnenshein said the company was 100% committed to pushing for approval, noting that it remained the path that would best benefit investors. On what happens next if the company loses its legal challenge against the SEC, the Grayscale CEO said:

“We are confident that the DC Court of Appeals will agree with our strong, common sense and compelling legal arguments, but we also appreciate the interest of investors in what happens to GBTC if the courts do not rule in our favor.”

Grayscale will not break GBTC

He added that Grayscale will consider a tender offer to return one percent of GBTC capital to shareholders. However, this route is an option if the asset manager has exhausted all options in the applicable courts, as well as determines that there is no way forward with respect to potential legislative and regulatory avenues.

According to Sonnenschein, the tender offer will be for 20% of GBTC’s outstanding shares. To achieve this, Grayscale will need approval from the SEC for certain reliefs as well as shareholder approval. The firm does not plan to dissolve GBTC even if it fails to seek a tender offer.

GBTC is trading at a steep discount to net asset value (NAV), which currently stands at 49% as the company navigates solvency concerns around parent-firm Digital Currency Group.

Grayscale’s exposure has also been a major source of shock for struggling crypto broker Genesis Global, with the crypto’s unbundling of GBTC likely to have a cascading effect on bitcoin’s price.