May. 10, 2022
May 10, 2022 As a GBTC investor, it is unfortunate that the SEC is seemingly doing everything it can to harm US investors rather than protect them -- I say that without exaggeration but backed by the data. Since Bitcoin ETFs became available in Canada and other countries, GBTC has consistently traded at a over a 25% discount to the underlying asset, where GBTC historically traded at a premium. To make matters worse, other countries continue to approve ETFs and take US investor and GBTC market share, while the SEC continues to reject applications. That leaves every GBTC investor prior to 2021 essentially trapped and underwater -- better off having invested in spot Bitcoin outside the regulated financial system on an unregulated exchange, rather than being restricted by the so-called shroud of US Investor Protection. An ETF approval would resolve this discount and likely bring GBTC trading back to par with spot Bitcoin, or close to it. Instead, trapped GBTC investors are stuck paying a 2% management fee (which would likely also lower with the approval of competing ETFs on the market) while enjoying the luxury of being \"protected\" as a US investor -- which I've learned to interpret as meaning investor restrictions and the everyday investor in the US continually gets the short end of the stick. Yes, it's unfortunate that the price of Bitcoin and nearly all investable assets are down in value considerably this year. But it's an absolute travesty that because of SEC \"investor protection\" GBTC shares are down considerably more and have been for quite some time. It's embarrassing. I personally invested in GBTC rather than spot Bitcoin because I thought it, being available through regulated brokerage accounts, would be more a more convenient and safer investment to hold over owning spot Bitcoin in that 1) I could easily invest in it with my IRA, 2) there are no self-custody/hacking/loss of wallet concerns, 3) it is easy to manage from an estate planning perspective, 4) it makes things easy for tax reporting purposes. Unfortunately that was a mistake. The SEC has let GBTC investors down as investors continue to suffer from either holding the asset at an extreme discount or faced with the decision to take an enormous loss -- both unfavorable particularly considering the current economic conditions where hard choices have to be made for many families who just need to pay rent, buy gas and feed their children. I am lucky to currently be in a position that I can wait it out and continue to take the ETF denial sucker punches from SEC, but I know there are many families that cannot. I take full responsibility for my decision and have learned a great lesson. Overall, this experience has lead me to lose great faith and trust in the SEC and opened my eyes to many things that I used to hold in such high regard and pride as a US citizen. I hope that the SEC does what is the obvious correct decision for US investors, approves the GBTC conversion and works towards restoring people's faith and trust in the SEC. Bottom line, please stop protecting me because you do more harm than good -- in this and multiple other instances that have had a material, measurable, negative financial consequences.