Apr. 23, 2022
Dear SEC, I write to you as a GBTC shareholder, in support of the conversion of Grayscale Bitcoin Trust (OTCQX: GBTC) to an ETF. Last October, you approved futures-backed Bitcoin ETFs, but continue to reject applications for spot Bitcoin ETFs. I understand that there are some regulatory differences between a spot ETF and a futures ETF, but due to backwardation( the arbitrage needed to constantly renew options in the futures based version) make it an extremely dangerous tool, especially for those who don’t understand the ramifications of a futures backed fund. I do not believe that having only a futures based ETF is a fair or safe way to structure the market. Furthermore, the discount to NAV in GBTC has been around 25%, on average, this year. This is mostly driven by the lack of optimism surrounding a conversion of the fund to a ETF. Given that GBTC has about $30bn in AUM, existing shareholders like me are experiencing a destruction of value of around $7.5 billion. GBTC is the world’s largest publicly-traded cryptocurrency fund, with hundreds of millions in daily trading volume. It holds approximately 3.4% of all Bitcoins outstanding, and is held by more than 850,000 investors, like me. I’m writing from New York with gratitude for the opportunity to express my view to you and with the hope and expectation that you will approve this conversion and protect the interest of investors, in line with your duty to the people of the United States of America. Sincerely, Zev Spiegel