May. 13, 2022
Monday, February 28, 2022
Re: File No. SR-NYSEArca-2021-90
Rel. No. 34-93504
Notice of Filing of Proposed Rule Change to List and Trade
Shares of Grayscale Bitcoin Trust (BTC) under NYSE Arca
Rule 8.201-E
(November 2. 2021)
Dear Ms. Countryman:
Today, I write as a shareholder who is in favor of approving the Form
19b-4 that NYSE Arca filed with you to convert Grayscale® Bitcoin Trust
(OTCQX: GBTC) into a Bitcoin Spot ETF.
GBTC is currently trading at a discount to its NAV, which means the
price of GBTC is less than the price of the physical asset, Bitcoin.
One of the benefits of converting GBTC into an ETF is it would allow for
simultaneous creations and redemptions - a core feature of the ETF
wrapper. This would cause shares trading at a discount to better reflect
NAV, and thus protect the hundreds of thousands of
investors currently holding GBTC.
Importantly and impressively, in 2021 you approved several futures-based
Bitcoin ETFs. This is significant because to the extent the SEC had
previously been concerned over fraud or manipulation in pricing of the
underlying spot/cash Bitcoin markets, that concern would have to
permeate across both spot-based and futures-based ETFs since both types
of products are priced based on the underlying spot/cash Bitcoin
markets. However, following approval of several future-based Bitcoin
ETFs, you subsequently disapproved several spot-based Bitcoin ETFs.
This inconsistency creates an unlevel playing field for Bitcoin ETFs
without reasonable basis for different treatment. To that point,
Grayscale's attorneys at Davis Polk have filed a letter in the context
of this comment letter period arguing that the approval of Bitcoin
Futures ETFs but not Bitcoin Spot ETFs, like what GBTC would be, is
"arbitrary and capricious," and therefore a potential violation of the
Administrative Procedure Act. Per the above, I strongly agree with this
new argument.
The SEC should approve GBTC for conversion to an ETF and allow investors
a choice over which product best meets their investment needs. To do
otherwise would go against the SEC's core mission of protecting investors.
Thank you for your time and consideration.
Sincerely,
Dr. Paul William Bradley