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00:00What's the end goal with the lawsuit. The FCC notoriously has not been interested in physically back to RTX. What do you hope to get out of this. The goal is to convert BTC to an ETF. When I think back to Grace Gill's earliest days when we launched BTC we'd always envisioned this to be an ETF. And since that time we've worked tirelessly to now build this into the world's largest bitcoin fund. Investors have been patient. We know that they want this. We know that they deserve this. And the lawsuit is really intended to challenge the S.E.C. decision here. Michael let's talk about the big issue which is the discount on BTC because yesterday Jupiters shares closed at a 28 percent discount to the net asset value. You and I have talked for hours about that. And now with ETF conversion seemingly off the table for at least now. What steps can grayscale take to try to repair that discount. Well certainly investors know that the conversion to an ETF is ultimately what will remove the discount in applying for an ETF. You're essentially getting relief from the S.E.C. to ensure that the fund can have simultaneous creations and redemptions which would arbitrage away that discount on this is such a missed opportunity. Katie and you know this better than anybody that the S.E.C. has not allowed this product to come even closer into the regulatory perimeter and give investors greater protection greater disclosure. And that really is what will fix the discount in BTC. Well with the S.E.C. seemingly sort of digging in its heels here rejecting the application and others it was also rejected last night. Is there a situation in which you would decide to liquidate BTC. We remain laser focused on the conversion to an ETF. You know last night within you know less than an hour as you guys shared after receiving the S.E.C. denial our attorneys filed a petition for review with the appellate court. We've been you know guided to believe that it could be call it nine to 12 months on that decision. It could be a little bit longer. Could be a little bit shorter. But we hold strong in our common sense arguments around the ETF conversion and have a fantastic legal bench that we'll be arguing the case on behalf of investors. Michael what's the timeline here. Advice investors have been patient thus far. How much longer should they be patient. 4. Well I think that when I look at the GTC shareholder base rate you now had you know millions of Americans who own shares in BTC individuals retirement accounts ETF own a mutual funds own its institutions own it. These tend to be investors that are investing in bitcoin over the medium to longer term. And so the way that they'd advocated the way that they voiced their concerns around this Aunt DAX or an ETF. And we believe that investors will be patient through the lawsuit and ensure that ultimately that conversion does happen. Is that this thing is it a 2023 thing. How long do I think it's going to take Michael. Well as I shared you know the fact that we are filing a lawsuit against a federal regulator causes this issue to bypass the district court and go straight to the appellate court. We have again been guided to believe that that's usually about a 9 to 12 month process. Could be longer could be shorter. And that's the timeframes that we're able to offer at this time. And Michael let's broaden this conversation out a little bit and talk about RTS role in the broader crypto ecosystem because there was news yesterday that three hours capital one of the biggest crypto hedge funds out there it was ordered into liquidation by a court in the British Virgin Islands. And as of December 20. Twenty three hours was one of the biggest holders in GV RTS. I'm curious are they still the biggest institutional holder in the trust. Well we're only able to you know obviously talk about our clients in the context of public filings. Katie you know our business model and product lifecycle all too well aware and investor like three arrows participated directly in the grayscale private placement. And so after that statutory holding period we don't have visibility into where the investor shares reside. And so the three arrows filing that you know what is now over two years ago or a year and a half ago it's hard to tell where those shares reside but they are still part of BTC overall. Last question here Michael. I mean this is from a viewer actually going back to the lawsuit. If you do win the lawsuit what then happens is the S.E.C. issue the ETF immediately. How quickly can you convert. It's like a different way of looking at your timeline. So there are some mechanical you know constructs that would be worked out if and when the lawsuit is won by grayscale. BTC holders would not have to do anything to have their existing shares registered as part of the. Yes. And you would see the shares up less to the New York Stock Exchange which is the listing partner that we've selected for BTC as an ETF. And then you'll start to see those primary and secondary market transactions that will allow for creations and redemptions of the ETF.

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Grayscale Remains 'Laser Focused' on Bitcoin ETF After SEC Rejection: CEO

Grayscale CEO Michael Sonnenshein explains the decision to sue the US Securities and Exchange Commission after the agency denied the firm's application to convert its Grayscale Bitcoin Trust into the first ETF based on Bitcoin. He speaks on "Bloomberg Markets: European Close." (Source: Bloomberg)

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