May. 18, 2022
Dear SEC, I write to you as a GBTC shareholder, in support of the conversion of Grayscale Bitcoin Trust (OTCQX: GBTC) — the world’s largest publicly-traded cryptocurrency fund — to a spot-ETF. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. I would also humbly request that having a 240-day, or near EIGHT MONTH, comment period is in no way protecting investors like me and in every way inhibiting progress and fairness. As can be easily observed by the thousands of similar letters already submitted, it would benefit individual investors greatly to get this process moving right along already and not stuck in endless years of red tape and delay tactics. 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, I’ve had much experience with futures-backed ETFs and futures, and they are more costly, require more active management, and in my humble opinion are more susceptible to price manipulations over short periods of time, as compared to what we’d get with a spot-ETF backed by the world’s largest BTC fund holder with immense transparency and consistency to its record. Furthermore, the discount to NAV in GBTC has been around 25%, on average, this year, after being as high as a 30-40% *premium* to NAV for much of 2020. This means that the price of GBTC is less than the value of the Bitcoin held by the trust, or 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, which for me personally amounts to north of $150,000, well north of my annual income or liquid cash on hand. The amount and value distortion is, in other words, highly material to me and so many others like me. I need not repeat all the articulate and highly compelling points made by other commenters, but vehemently agree in support, and truly haven’t heard one single convincing reason why holding this spot-ETF off the market is in any way serving to protect my interests and those of other individual investors and market fairness generally. I’m writing from the great State of New York, 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 and fair competition and access in markets. Sincerely, Lil’ Foges, LLC Holder of 20,000 GBTC shares