Grayscale has been in continuous communication with the SEC, with the GBTC discount narrowing and the GLNK premium reaching as high as 223%.

According to a report by CoinDesk, the U.S. Securities and Exchange Commission (SEC) has entered negotiations with Grayscale Investments regarding the details of converting GBTC to a spot Bitcoin ETF. The discount on GBTC has narrowed, while its other fund GLNK is trading at a premium of up to 223%.

Bitcoin Holds Steady as Market Optimistic about Spot ETF

The market is eagerly awaiting SEC approval for a Bitcoin spot ETF, which could simplify the way for investors to enter the digital assets space. Asset giant BlackRock submitted an application for a spot Bitcoin ETF in June, prompting various asset management companies to participate. Bitcoin has been on an upward trend from around 24,800 and has recently held steady above 35K.

Sources: Grayscale Continues Communication with SEC

Although Grayscale was one of the earliest asset management companies to enter cryptocurrencies like Bitcoin, its closed ecosystem, combined with the inability to redeem in the primary market, has led to persistent discounts. The discount reached nearly 50% at the end of last year.

To address the discount issue, Grayscale has repeatedly proposed converting its GBTC to a spot Bitcoin ETF. After multiple rejections by the SEC, Grayscale resorted to legal action, eventually leading to a judge ruling at the end of August that the "SEC must re-examine the transformation of GBTC." Grayscale also submitted an S-3 registration application to the SEC in mid-October.

Currently, according to sources, the SEC's Trading and Markets Division has been in constant contact with Grayscale to assess whether the process of converting GBTC to a Bitcoin spot ETF complies with regulations.

Grayscale's General Counsel, Craig Salm, stated:

Right now, we're just focused on having a constructive re-engagement with the Trading and Markets Division.

Salm did not provide details on the interaction, but in an interview, he mentioned, "There are still some things to work out." He also noted that other applicants for a Bitcoin ETF, including BlackRock and Fidelity, seem to be making progress in negotiations with the SEC. However, regarding Grayscale's application this time, he said:

Overall, it's been a very good engagement. It's not a matter of if, but when.

GBTC Discount Narrows, GLNK Premium Reaches 223%

However, the market still holds an optimistic view, as the discount on GBTC has narrowed steadily from June and currently stands at 12.26%.

Grayscale's other funds have also been boosted by the positive sentiment in the crypto market. The Grayscale Chainlink Trust, which focuses on investing in the decentralized oracle protocol Chainlink, has seen a surge in funds inflow, leading to a premium of up to 223%.