FINRA Greenlights Grayscale’s Bid to Launch Litecoin and Bitcoin Cash Trusts
Grayscale, a leading cryptocurrency asset management firm with $4 billion assets under management, has received approval from the United States Financial Industry Regulatory Authority (FINRA) to launch its Bitcoin Cash Trust and Litecoin Trust and make the shares available for public trading on over-the-counter (OTC) markets, according to a press release on July 20, 2020.
Grayscale Roll Out Bitcoin Cash and Litecoin Shares
Grayscale Investments, a highly reputed cryptocurrency fund management firm established in 2013, has been given the go-ahead by FINRA to launch the Grayscale Bitcoin Cash Trust (BCHG) and Grayscale Litecoin Trust (LTCN), its fifth and sixth publicly-quoted crypto investment vehicles.
As stated in its press release BCHG and LTCN are both open-ended trusts designed to make it possible for investors to gain exposure to the price movement of the underlying bitcoin cash and litecoin through a traditional investment vehicle without having to bother about the challenges of buying, storing and safekeeping the digital assets.
Importantly, the firm has made it clear that the shares of both trusts will have no trading volume until they are fully compatible with the Depository Trust Company (DTC), after which investors will be able to buy and sell BCHG and LTCN via their investment accounts.
Secondary Markets for Private Placements
Grayscale says it has offered a private placement to accredited investors since March 2018, and as of June 30, 2020, “there were 2,725,300 shares outstanding of Grayscale Bitcoin Cash Trust and each share represented ownership of 0.00943312 Bitcoin Cash.”
On the other hand, Grayscale Litecoin Trust had 509,400 Shares, with each of them representing ownership of 0.09433120 litecoin as of June 30, 2020.
With the launch of the Bitcoin Cash and Litecoin Trusts, Grayscale now has six public offerings providing investors exposure to established cryptos including bitcoin (BTC), ethereum (ETH), ethereum classic (ETC), XRP, stellar lumens (XLM), zcash (ZEC), and horizon (ZEN).
It’s worth noting that Grayscale Investments remains one of the major firms accelerating institutional adoption of bitcoin and altcoins.
BTCManager informed in May 2020 that institutional investors were stacking up their bitcoin holdings via Grayscale Investments since the halving event took place earlier in the year.
In April 2020, reports emerged that institutional investors had bought nearly half of the entire 1.5 million ether (ETH) mined in 2020.