May. 06, 2022
Dear SEC, I am a cardiologist working in Plano, Texas. I am an accredited investor with extensive experience and understanding in various investments, including stocks, bonds, options, private equity and cryptocurrencies. I hold GBTC in a retirement account at Fidelity. As a GBTC shareholder, I strongly support the conversion of Grayscale Bitcoin Trust (OTCQX: GBTC) to an ETF. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. First, the argument that I must be protected against volatility is spurious. I and most Americans, have endured tremendous volatility in the stock market multiple times, including the present crash. SEC has not "protected" American from such stock market volatility. Second, holding a small amount of BTC has been shown to offset portfolio volatility which is why many experts, such as Paul Tudor Jones and Stanley Druckenmiller advocate BTC as a valuable hedge against both market volatility and the continued destruction of our currency by the Fed. Third, as you know, many large institutions are offering BTC ETFs in Europe and Canada. We Americans deserve the same opportunity. Last October, you approved futures-backed Bitcoin ETFs, but continue to reject applications for spot Bitcoin ETFs. SEC more than anyone understands that futures ETFs are subject to more volatility and market manipulation than spot ETFs. In that regard, the continued rejection of spot ETFs by SEC is contrary to your stated intent of protecting investors. It therefore gives the appearance that SEC is being arbitrary and irrational. Investors should be enabled by SEC to chose whether to invest in a futures-based or spot-exposure to Bitcoin. Finally, 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. Approving the conversion of GBTC to a spot ETF would eliminate that discount and improve the financial condition of holders of GBTC. I appreciate the opportunity to express my view on this important matter. We investors have waited far too long for SEC to approve a spot BTC ETF and GBTC has a proven track record of investor protection. Approval of this conversion is beneficial to me, my family and other Americans. I urge you to approve this conversion and protect the interest of investors. Sincerely, Paul A. Grayburn, MD