Feb. 7, 2022
I support the listing of shares of BTC (Grayscale Bitcoin Trust) as an exchange-traded product. The market for spot Bitcoin is extremely liquid, with a bid-ask spread, for example, of 0.003% over a recent 6-month period on major exchanges Coinbase and Kraken. This tight bid-ask spread is, almost by definition, indicative of a market that lacks manipulation and offers participants a fair price as dictated by the market. In comparison to the Bitcoin market, the bond market, particularly non-Treasury products such as CMBS and Senior Loans, trade at significantly wider bid-ask spreads. "BBB"-rated CMBS normally trade at bid-ask spreads of 0.5%, and in more stressful markets can trade at spreads of 3%-5%. Lower-rated Senior Loans typically trade at spreads of 0.5%-1%, and in more stressful periods can trade at spreads of up to 10%! In many cases, the "value" of a bond is determined by one trade during a particular month, if it trades at all. In cases where a particular bond doesn't trade during the month, a model is utilized to derive a price. As such, many bond categories are much more susceptible to manipulation than the Bitcoin market. And yet, there are hundreds of bond ETF's in the market. The Bitcoin spot market, as indicated by its bid-ask spread, offers participants fair prices, much more fair than most bond markets. As such, a spot Bitcoin ETF should be made available so that consumers have a choice to obtain exposure to Bitcoin through such a vehicle. David Pierce