March 4, 2022
Dear Mr. Gensler,
As an investor in the Grayscale GBTC Trust, I believe the approval of a spot-based Bitcoin (BTC) ETF is long overdue, and needs to be approved by the SEC. The logic of approving the conversion of GBTC as the first BTC ETF seems clear to me for many reasons, including the following:
- Grayscale has by far the longest history and experience with a Bitcoin-based investment vehicle in GBTC.
- Grayscale holds the most BTC, by far, of any other applicant for an ETF.
- I believe a spot-based ETF would be safer and simpler to invest in than the Bitcoin futures (i.e. derivative) products which the SEC has already approved.
- The management fees, according to Grayscale, of an ETF would be significantly lower than for GBTC, further protecting investor returns.
- The growing discount to the price of GBTC vs. the underlying NAV of the BTC held in the Trust is indicative of the need to convert it, and partly the result of market participants (mostly institutions?) moving funds into the BTC ETFs already approved in Canada and Europe, with more approvals pending. Approval of the conversion of GBTC to an ETF would collapse this discount to NAV and thereby protect current and future investors with more accurate price discovery.
Individual U.S. investors and institutions alike clearly want this approval. The Bitcoin network has demonstrated that it is the most secure in the world over the last 13+ years. Please don't continue to 'protect me' and other U.S. citizens from the opportunity to participate in the safest method to invest in this burgeoning new asset class in a retirement fund and generate wealth for myself and my family. I'm confused and frustrated as to the repeated delay(s) of this approval, while far riskier derivatives investment products for other assets have been approved, used (and sometimes abused) for years. Why is that, and what is the reason for not approving this spot ETF at this point? It's really hard to understand the rationale, frankly.
This is an exciting and important new asset class. America can either lead, both in the technology and development of cryptocurrency, and the financial instruments that are created, or they, and their citizens as a result, may be left behind, due to responsible innovation and capital formation going elsewhere.
Regards,
Grant Johnson