Apr. 09, 2022
Dear SEC, I’m writing to express my very strong support, for the conversion of Grayscale Bitcoin Trust (Symbol: GBTC) into the first Spot Bitcoin ETF in the United States. In my humble opinion, it is extremely important to take a holistic view when evaluating any ETF Sponsor. When you look at the success of new ETF product launches, regardless of the underlying index or product, all have thoughtfully prepared plans to create a robust ecosystem that supports the product through the launch, growth and maturation phase of its lifecycle. A successful launch is dependent upon fully engaged market makers, traders, financers and research providers ready to service all investor participants from the open of day 1. If any of those parts of the ecosystem fail to meet customer expectations, the product will have slowed adoption. Grayscale is the world's largest digital currency asset manager. They currently manage 17 Investment products ranging from a number of single Digital Currency Funds, to a Digital Large Cap Equity Fund. They have successfully built a full suite of product offerings to serve the needs of the full range of investors. As this ETF is a first of its kind product, I believe the SEC take into consideration that any ETF submissions you choose to evaluate should come from Sponsors that have demonstrated ability and commitment to meet the needs of the investing public by providing a broad range of products. For this space to mature safely, investors need a full range of products that allow them to express diverse investment opinions. This ETF will not be successful, safe or effectively serve the needs of all participants in the marketplace unless it is part of a larger, and well thought out suite of complimentary and competing products. Investors will be best served only if they can express and maintain their many opinions(L/S) across products and time horizons. If you choose Grayscale, you will be going with a firm that is most deeply committed to digital investment products. I think it is critical for liquidity, credibility and overall health of the Digital ETF Ecosystem that you choose a sponsor of the cash based ETF, a firm that is not only committed to a broad product suite, but also to all of the other parts of the digital ecosystem. I worked at Citi for 15 years covering many of the largest ETF sponsors. We viewed the ETF sponsors as branding and marketing companies. All of the necessary services associated with the daily servicing of ETF participants, such as trading, financing, clearance and custody were opportunities for us to interact with our customers. We viewed ETFs as a product that created velocity on our platform. Velocity defined as the ability to move more securities to more customers more often...and most importantly, a way to trade baskets of securities more efficiently and at a lower cost. BDs make money on movement, and in this case ETFs created a virtuous cycle of faster movement and lower cost to end users. In fact, BDs and Authorized Participants interact more with ETF end users than do the Product Sponsors. It is this associated ecosystem that needs to be conceptualized, developed and nurtured to have a successful ETF launch and lifespan. When you approve an ETF that is based off the physical marketplace, the same phenomena will occur. Products will trade more often, and with more transparency. This increase in liquidity/transparency/utility will add more credibility to digital products. New participants and capital will be drawn to the digital space, accelerating its innovation and maturation. It is this new reality that I think is critical in your decision making. You should select a sponsor that has thoughtfully anticipated this growth, and can meet it with sophisticated resources. Grayscale, a company within the Digital Currency Group ,is the absolute right choice to go with in this new product launch. Not only are they the largest Digital Asset Manager, they are an integrated part of the most sophisticated player in the global Digital Currency space. It is very important to anticipate potential pitfalls for the early days of any product launch. When choosing Grayscale, you are choosing a sponsor that can call upon a larger parent organization with wide ranging resources to address any challenges that might arise. If I were a decision maker in this case, it would bring me great comfort that I was going with a firm that not only had significant skin in the game, but a sponsor that was part of a larger organization that had all of their skin in the game. DCG is a next gen fully integrated digital conglomerate. They are committed to the success of this ETF as a critical part of corporate strategy. In closing, I believe strongly that the underlying blockchain technology associated with digital currencies will effectively allow society writ large to transition to a more equitable web environment allowing for more simplified and transparent financial transactions. DCG is working hard to make that a reality through each of their businesses across the entire digital ecosystem. Grayscale is a small part of that vision, but its mission of creating safe sophisticated products is critical to drawing more investment capital to the space. This marketplace is ready for a cash backed ETF, and Grayscale is the exact right partner to sponsor this product. I can be reached at [REDACTED] if you have any questions. Best, Thomas M. Wynne Sincerely, Thomas M. Wynne