May 12, 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. By approving this conversion, you are allowing me to protect myself more effectively and are protecting me. Establishing a spot ETF, which already exists and is available for many investors in Canada, Europe and soon Australia enable me to invest on a more effective basis relative to investors globally. The SEC is really only stopping some US investors from spot investment in Bitcoin. Many investors either invest in Bitcoin directly (which can be complicated) or through access to foreign funds (“special investors”). 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. Also the basis calculation that is necessary for this trust is an undue burden placed on shareholders to to this structure, this in itself is less than beneficial for shareholders. I’m writing from New Mexico, with the hope that you will approve this conversion and protect the interest of investors. The SEC is suppose to protect the investor, however I find little evidence of this given the lack of real enforcement action taken against large “Wall Street” banks (JPM, GS, MS, …) for their illegal activities. Frequently relatively minor fines are levied against these banks, these fines pale in comparison to the gains that have been achieved under these illegal activities (JPM in particular). Sincerely, J. S. Dreicer