Today, Vanguard has informed its clients that it will stop supporting over-the-counter (OTC) securities. This means that Grayscale Bitcoin Trust and Grayscale Ethereum Trust, based on cryptocurrencies, can no longer be bought. Here are the details…
Vanguard Stops Trading GBTC and ETHE Crypto Trusts
Vanguard customers may not be able to purchase both Grayscale Bitcoin Trust and Grayscale Ethereum Trust in the near future. This is a result of the fact that the company has discontinued its over-the-counter securities services, including support for purchases and transfers. Investors hoping to get the risk of crypto assets through stocks on the stock market will soon face a new obstacle.
Clients of Vanguard, an American investment advisor that manages assets worth about $7 trillion, have been informed that from April 28 they will no longer be able to buy or transfer most of the over-the-counter (OTC) securities. According to the criteria listed in the email, this includes both Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). As for the reason for the change, the email contained a note about Vanguard’s investment philosophy with an emphasis on a long-term and reliable strategy.
Over-the-counter products are popular
Over-the-counter securities are traded outside the stock exchange. This is often due to the fact that they do not meet all the requirements for listing and trading on exchanges such as the New York Stock Exchange or Nasdaq. Grayscale’s Bitcoin and Ethereum products are traded on the OTC market and are a popular way for institutions to invest in cryptocurrencies. Investors who already own GBTC and ETHE will be able to keep them in their portfolios after the change on April 28.
As we reported on Somagnews, one of the reasons why GBTC and ETHE are widely used as a tool to gain crypto exposure is that there are no Bitcoin (or Ethereum) ETFs approved by the U.S. Securities and Exchange Commission (SEC). Grayscale has filed an application with the SEC to convert GBTC into a spot ETF. Last month, Grayscale CEO Michael Sonnenshine said he would file a lawsuit with the SEC if his firm did not approve the spot ETF application.