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. It is beyond my comprehension why am ETF related to Bitcoin futures is acceptable but not one related to the Bitcoin spot price. This is unfortunately a good example of government overreach. How are you protecting me as an individual investor? I could name many ways that every day O am exposed to market makers and others manipulating share prices to my detriment; I am not protected against much of that manipulation. After investing for 40 years Iave seen many such cases where either a market maker cheated me or some cases where I was able to avoid such deception. I would suggest that the price of Bitcoin, being driven by far more investors and having a much higher market cap than the majority of US stocks, is far less prone to manipulation. The elimination of a market market- or should that be money maker - from Bitcoin trading gives me comfort that Bitcoin prices are likely to be less susceptible to illegal manipulation. 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. 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.I’m writing from Illinois, 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. Mervyn Kopinsky