Apr. 22, 2022
Dear SEC, I write to you as a GBTC shareholder, in support of the conversion of Grayscale Bitcoin Trust (OTCQX: GBTC) — the world’s largest publicly-traded cryptocurrency fund — to an ETF. Crypto currencies are a two trillion dollar asset class. It is disappointing that a spot cryptocurrency investment vehicle is not represented on the US stock markets. If the SEC thinks that by not approving the conversion because of “investor protection” than it should be well aware that that ship has sailed. Crypto currencies are held, speculated on and actively traded in the US on various specialist exchanges. Many investors do not want to participate on those exchanges for many reasons and a spot ETF, traded on a major US stock market, is a secure and transparent mechanism for investors to get exposure to this asset class. Last October, you approved futures-backed Bitcoin ETFs, but continue to reject applications for spot Bitcoin ETFs. Given that investors use both vehicles to gain exposure to the same underlying asset, Bitcoin—from which both vehicles derive their prices—we, as investors, should be able to choose if we’d like direct or futures-based exposure to that asset. Approving the conversion to an ETF would enhance liquidity which is a key consideration for any investment. Furthermore, the discount to NAV in GBTC has been around 25%, on average, this year. This means that the price of GBTC is less than the price of Bitcoin, the asset itself. Given that GBTC has about $30bn in AUM, shareholders like me are experiencing a destruction of value of around $7.5 billion. I’m writing from California, with gratitude for the opportunity to express my view and with the hope that you will approve this conversion and protect the interest of investors. Sincerely, Kevin Lowther AM, ABV, FMVA