May 6, 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 looking out for my best interests as an investor. ETF conversion will reduce the high back door fund management fees that GBTC currently has. That benefits investors. Investors want exposure to Bitcoin and other crypto currencies through their normal brokerage accounts. This reduces the record keeping for them and enables them to get Bitcoin exposure without having to pay high fees and without having to buy Bitcoin directly. Fees are higher for the investors when buying Bitcoin through cryptocurrency exchanges. Investors that want Bitcoin exposure can reduce investment fees by having Bitcoin ETFs to invest in. Investment in a Bitcoin ETF is safer when it comes to security of the asset versus holding actual Bitcoin in a Bitcoin wallet or on a crypto currency exchange. The discount to NAV in GBTC has been between 20% and 30%. This means that the price of GBTC is less than the price of Bitcoin, the asset itself. It makes sense to approve a change to allow GBTC to become an ETF. This will eliminate that discount. 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. Not every investor is knowledgeable about futures. Give us investors the opportunity to buy and sell spot Bitcoin ETFs. Benefit summary of allowing Bitcoin ETFs Lowers fees when investing in Bitcoin (Removes high Mutual Fund fees and virtually no broker fee to buy the Bitcoin ETF) Lowers fees when selling the Bitcoin ETF versus selling actual Bitcoin For some investors holding an ETF that invests in Bitcoin is easier for them versus buying and selling on a Crypto currency exchange Many investors will get a better secured feeling investing in a Bitcoin ETF versus the Bitcoin itself. NAV discount in GBTC goes away and value is better aligned with the value of actual Bitcoin. Tax compliance easier for average investor. I’m writing from Florida, 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, Mark Grego