May. 05, 2022
Dear SEC, I write to you as a GBTC and ETHE shareholder, in 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. The current situation creates an anomaly and substantial additional risk and speculation in the market. 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. 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. This anomaly hurts me personally and introduces additional unnecessary risk into the marketplace. I’m writing from Virginia 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. Please fulfill your fiduciary and regulatory responsibility and approve this change. Sincerely, Thad Konopnicki