Apr. 22, 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 an ETF. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. I understand the risks associated with cryptocurrency pricing, but I do feel it is fair to also have the additional risk of GBTC not tracking to the actual price of Bitcoin. 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, the discount to NAV in GBTC has been around 25%, on average, this year. This means that the price of GBTC is less than the price of Bitcoin, 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. This also means that if I want to move my money from my IRA into Bitcoin directly through an outside service, I would lose this 25% permanently. I see no advantage to any investor in forcing this to continue as a trust instead of a spot ETF. I’m writing from Michigan, 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. Sincerely, James Gavin