> GBTC’s central problem is that it has been superseded by the advent of better vehicles for holding bitcoin.<p>This really has nothing to do with FTX in the way anyone would assume from this headline; at best "the value of crypto generally went down a bit, so anything tied to the value of crypto would go down a bit"... but it isn't like this product now has some fundamental predictable negative change in its value proposition due to some form of financial contagion from FTX.<p>The core problem is this fund never made sense to begin with: it is a share in a company that itself owns Bitcoin, and so one might naively assume the share is going to be priced as "amount of bitcoin owned divided by number of shares"... but if you own a share of a company you can't ever get your share of the assets of that company so the share price is going to be worth a lot less than that and it is ridiculously naive to believe that you can value a stock like that.<p>> The underlying problem is that — unlike for ETFs — there is no arbitrage mechanism to bring supply and demand back into balance.<p>Essentially, the value of these shares were then entirely defined by what amounts to a prediction market on whether the people who created the product were going to manage to pull off getting it converted into a form of regulated entity where the value of the shares <i>would</i> work like that, and, so far, the SEC hasn't let them.<p>> Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
<a href="https://www.ft.com/content/29a2f96f-6d9b-4593-abdf-ffaadc502951" rel="nofollow">https://www.ft.com/content/29a2f96f-6d9b-4593-abdf-ffaadc502...</a><p>> “It’s highly disappointing that the SEC continues allowing any retail investor to access this fund, yet they won’t approve a spot bitcoin ETF which would solve the discount problem. This is yet another example of the absurd regulatory dysfunction around the entire crypto ecosystem right now,” Geraci added.<p>I've even heard the conspiracy theory before that this is some kind of plot by the SEC to help drive people to centralized exchanges that they are connected with (as Gary Gensler might be with FTX) or that they expect to fail (in an attempt to kill cryptocurrencies). But like, FTX now <i>having failed</i> frankly would seem to only bolster the argument that a clean regulated ETF would be much saner than all of this exchange mess.<p>> Moreover, Geraci believed the FTX debacle has bolstered the case for regulatory oversight of crypto exchanges, “theoretically accelerating the timeline for spot bitcoin ETF approval”.