Grayscale – who dumped XRP amid SEC v. Ripple – partners with BNY Mellon ahead of ETF conversion

Rick Steves

Grayscale plans to convert Grayscale Bitcoin Trust into an ETF in accordance with the firm’s strategic product pipeline.

Grayscale Investments has selected BNY Mellon as an asset servicing provider for Grayscale Bitcoin Trust (OTCQX: GBTC), effective October 1, 2021.

BNY Mellon will provide Grayscale Bitcoin Trust with fund accounting and administration as well as transfer agency and ETF Services for the Grayscale Bitcoin Trust upon its conversion to an ETF.

The Grayscale Bitcoin Trust is worth nearly 40,000 bitcoins. The conversion to an ETF will unlock its shares and could move the markets in unpredictable ways, but price pressure may actually never realize, said Kirill Suslov, CEO of trading app TabTrader.

“It depends on who the investors are. Usually, institutions rebalance their portfolio according to the mandate. So if they are underwater, because the bitcoin price has dropped, they will actually have to buy more to keep the mandated allocation to this asset class.”

“We have to notice that it is not BTC getting unlocked, as it’s just the Grayscale shares (GBTC), and as the trust has no redemption mechanism, GBTC cannot sell its bitcoin holdings. So the unlocking of GBTC shares should not move the spot price of BTC. However, misleading and complex information lets investors worry and, therefore, can create short-term bearish anxiety. Additionally, a sell-off of GBTC could put additional pressure on Grayscale to increase their share buyback strategy to lower the discount to the NAV of the trust and medium-term, create a bullish trend for GBTC shares”, said Laurin Bylica, Co-Founder of TheStandard.io.

Ulrik K.Lykke, Executive Director at ARK36, said: “Investors should note that no actual spot Bitcoin is being released so, in theory, the unlocking of GBTC shares should not have any direct effect on the Bitcoin spot market. However, if all investors holding the currently locked-up shares rushed to exit their investment at the end of this lockup and started mass selling their shares, it would likely exert downward pressure on the BTC price.”

Scalability, resiliency, and automation are a few of the benefits that BNY Mellon’s platform can offer Grayscale, but its proprietary ETF Center – designed to support digital asset ETFs – will prove valuable as the subsidiary of Digital Currency Group prepares the move to ETFs.

Grayscale Investments is the world’s largest digital currency asset manager, with more than $30B in assets under management as of July 9, 2021. Grayscale products are distributed by Genesis Global Trading.

Michael Sonnenshein, CEO of Grayscale Investments, commented: “Engaging BNY Mellon is an important milestone as part of our commitment to converting Grayscale Bitcoin Trust into an ETF. BNY Mellon has a long-standing reputation as a trusted provider and has established one of the first teams dedicated to servicing the growing digital currency asset class. We are pleased that BNY Mellon will join a group of Grayscale’s best-in-class service providers, helping us deliver a seamless, industry-leading investment experience.”

Roman Regelman, CEO of Asset Servicing and Head of Digital at BNY Mellon, said: “Providing essential fund administration services to the world’s largest digital currency asset manager further validates that BNY Mellon stands squarely at the intersection of trust and innovation. It’s another critical milestone in our rapidly growing digital asset capabilities and broader strategy of putting client choice at the center of everything we do.”

Grayscale plans to convert Grayscale Bitcoin Trust into an ETF in accordance with the firm’s strategic product pipeline. The relationship with BNY Mellon ensures Grayscale Bitcoin Trust is positioned for long-term success in the eyes of both parties.

With over $1T in ETF assets, including being the market-leading servicer of commodities exchange-traded products, BNY Mellon’s collaboration with Grayscale expands the Bank’s footprint in the digital asset space.

Grayscale began the dissolution of its XRP Trust in January following the U.S. Securities and Exchange Commission’s lawsuit against Ripple Labs, which alleges the XRP token is a security under federal securities law.

“It is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations”, the firm said at the time.

The XRP trust had raised $19.2 million from 70 investors over its nearly three-year run, but it is unclear how much it was worth at liquidation.

The price of XRP took a dive once the SEC filed the complaint against Ripple Labs and its co-founders Brad Garlinghouse and Chris Larsen, but despite the trust dissolution and the many XRP delistings from leading US cryptocurrency exchanges, the market remained quite dynamic, even skyrocketing towards the $2 mark in April 2021.

The price is currently subdued just above $0.60, which is still higher than the day the lawsuit was failed, December 22, 2020.

 

Read this next

Digital Assets

Flock.io and io.net Unite to Pave the Way for Decentralized AI Development

In an effort to create a community-driven Flock.io platform for on-chain, decentralized AI models; the leaders have decided to join hands with io.net to power Flock with decentralized computing.

blockdag

Crypto 2025: The Action Points to Follow to Capitalize on Bitcoin and BlockDAG Network’s 2025 20000X ROI Predictions

In this analysis, we delve into the price predictions for Bitcoin and BlockDAG Network, and we explore the factors driving these projections while offering actionable insights for investors that are looking to capitalize on the 20000x potential of these projects.

Retail FX

Orfinex joins Financial Commission as approved broker member

Multi-asset brokerage firm Orfinex has become a member of the Financial Commission, joining the ranks of the self-regulatory organization. This accreditation reassures traders that the firm meets the quality standards set by the commission.

Fintech

Telegram CEO’s Bitcoin stash valued in hundreds of millions

Telegram CEO Pavel Durov revealed that he has held several hundred million dollars in fiat and bitcoin for the past decade.

Digital Assets

Bitcoin drops below $60K as halving just 300 blocks away

Bitcoin fell below the $60,000 mark on April 17, just days before a scheduled reduction in mining rewards, known as the “halving,” which is set to occur on April 20.

Chainwire

New Meme Coin ICO Dogeverse Raises $6 Million After Completing Coinsult Audit

A new multichain meme coin, Dogeverse, has raised $6 million in its presale and recently passed a smart contract audit.

The new meme coin leverages bridge technology, ensuring the token is available across the most prominent on-chain markets.

Retail FX

Interactive Brokers posts Q1 earnings, raises dividend

Interactive Brokers Group Inc (NASDAQ:IBKR) announced its first-quarter financial results for the period ending March 31, 2024. The leading automated global electronic broker reported a GAAP diluted EPS of $1.61 and an adjusted EPS of $1.64.

Fundamental Analysis, Tech and Fundamental

Global FX Market Summary: USD, FED, Gold  April 17 ,2024

The Fed’s hawkish stance on interest rates is strengthening the US dollar while central banks globally grapple with inflation and economic growth.

Digital Assets

Kraken launches self-custodial wallet, joining competitors like Coinbase

Kraken, the second-largest U.S.-based cryptocurrency exchange, has introduced its own digital wallet, aligning its offerings with those of competitors like Coinbase.

<