May. 06, 2022
Dear SEC, I am an investor in a number of instruments, including stocks and Bitcoin. I hold GBTC, Grayscale Bitcoin Trust (OTCQX: GBTC), in my retirement account, and actual Bitcoin in an exchange. I am writing today in support of the conversion of GBTC to an ETF which tracks the spot price. Currently the trust uses futures to track the price, which introduces multiple market inefficiencies and impairs price discovery on the fund. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. 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. Throughout the year or two I've held the GBTC trust, I've watched the discount to NAV increase as the uncertainty in the price of GBTC impairs its reliability in tracking the underlying asset. 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. I’m writing from the state of Iowa, 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, Richard A. Holmes Software Engineer, John Deere Stanford Graduate, MSCS