Feb. 24, 2022
Dear SEC Commissioners and Staff, Thank you for allowing the public to provide comments on why GBTC should be allowed to convert to a spot ETF. Allowing GBTC to convert to a spot ETF is the only way to create an ETF product that very closely tracks the underlying asset, Bitcoin, in registered markets. Currently, futures ETFs have a huge and persistent shortfall (-5% to -15% annual shortfall!) in returns vs underlying bitcoin spot price due to futures curve contango. This product will persistently harms retail investors. A spot ETF will not persistently harm investors, it simply gives you the return of the underlying asset. GBTC already has $30 billion-plus AUM and could easily provide the market with a source of liquidity for an ETF. No other closed-end fund is even close to large enough to provide this kind of liquidity. As you know in closed-end funds, usually the issue is that the manager does not want to convert to an open-ended fund, which harms investors because they generally experience their assets trading at a discount. However in this case, it is our own government that is preventing the conversion to an ETF, and the manager fully wants to convert. Bitcoin Futures ETFs which you allow, are literally a hand out to the arbitrage community at the expense of the retail community. A spot ETF would provide far less arbitrage opportunity as the asset would trade close to NAV, just like almost all other ETFs do. Please do not favor the institutional arbitrage community over retail investors. The purpose of the SEC is to protect unsophisticated investors, not give handouts to sophisticated investors. Other countries like Canada already have allowed closed-end funds to convert to spot ETFs, and they work just fine. Please consider the return difference between Canadian spot ETFs and US futures bitcoin ETFs, the difference is dramatic. Come on team, this is obvious. Best, Brad _______________________ Bradley P. Calder ________________________