Feb. 22, 2022
It is high time for the SEC to allow registration of an exchange trade fund (ETF) that holds Bitcoin as its primary asset. Certainly you are aware that there is a very large trust, the Grayscale Bitcoin Trust (GBTC), that holds a large quantity of Bitcoin. GBTC currently trades at a large discount to the market value of its holdings largely because it does not have the redemption features of an ETF. At other times, GBTC has traded at extremely high premiums. There is an abundance of evidence that the exchange feature of the ETF structure reduces reduces such price distortions. By allowing GBTC to convert to an ETF, the SEC would accomplish significant good in the Bitcoin market by eliminating inefficiencies and enhancing liquidity and price discovery. It boggles to mind to attempt to understand why the SEC would approve an ETF that holds dollar-settled futures contracts in Bitcoin while rejecting the application for an ETF holding the underlying asset itself. It is also hard to understand why the SEC favors a market structure for GBTC that results in large premiums and discounts. Many, if not most, individual investors are unaware of the intricacies of a futures ETF and the advantages of the ETF structure in the underlying asset. I trust that the people at the SEC understand that allowing GBTC to convert to an ETF would be a benefit to individual investors and to the market as a whole. Best regards, Robert Broadfoot