May. 06, 2022
Dear SEC, I write to you as a GBTC shareholder living in the State of Texas. I wholeheartedly support of the conversion of Grayscale Bitcoin Trust (OTCQX: GBTC) — the world’s largest publicly-traded cryptocurrency fund — to an ETF. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. 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. How is it possible that the SEC doesn’t yet allow this spot-based ETF in the name of protecting investors…….from themselves when it is legal to participate in lotteries and go to gambling casinos? We are grown ups fully capable of taking the risks of owning stocks, mutual funds, ETF’s, etc. and know fully well we can lose our principal in the process. That is why we don’t put everything into “risk on” investments. But we certainly want the option to put at least some principal at risk in a potentially high-return ETF like that proposed by Grayscale for the GBTC. 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 Texas, 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, James Smith