Hi everyone, just wanted to share and get some feedback on my thought process about what to expect with GBTC once the conversion to an ETF finally happens.
GBTC has been referred to as a black hole, as there is no mechanism to redeem shares for BTC. Money goes in, Grayscale buys BTC, and that BTC is never sold.
My first thought upon reading the news was: does it mean that the fund would no longer be a "black hole"; i.e., would these coins be effectively back in circulation?
I understand that not all ETFs are necesarily redeemable for the asset they track (for example, not all gold ETFs are redeemable for physical gold). That being said, what would happen if investors favoured another ETF and decided to sell all or near all their GBTC shares? Would GBTC have to liquidate a lot of bitcoin?