May. 06, 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, but instead you are putting me at a financial disadvantage. 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 myself are experiencing a destruction of value of around $7.5 billion. Likewise, GBTC has been in business for years and at no point has there been a risk to investors losing the underlying asset, bitcoin. GBTC has proven they are a competent custodian of their assets under management and of bitcoin specifically. Add that to the fact that other countries have leapfrogged us into accepting a Bitcoin ETF, you are severely hampering the average investor. Forcing us to purchase an ETF from an OTC market is much more dangerous than being able to purchase an ETF in which the SEC can monitor their behavior and ensure they are adequately securing the underlying assets. Put more scrutiny on them than you normally would a regular ETF, GBTC has stated they expect it and would welcome it. I’m writing from New Jersey, 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, Veton Vejseli