May. 06, 2022
Dear SEC, I write to you as a GBTC shareholder. I am 64 years old and have a large portion of my retirement savings in Grayscale Bitcoin Trust (OTCQX: GBTC). The ETF has been under pressure and discount to NAV due in large part to the refusal to approve the ETF conversion as it reduces the number of institutional investor who can add Bitcoin to their portfolio. Therefore, I am writing to you in favor to a convention of GBTC to a Bitcoin Spot ETF. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. This is in fact harming me. I also understand many politicians see Bitcoin as a threat to the dollar. Please allow me to assure you, any troubles tu US Dollar has, is due to the irresponsible fiscal and monetary policies carried out in the last 3-4 decades, not Bitcoin. 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, existing shareholders like me are experiencing a destruction of value of around $7.5 billion. GBTC is the world’s largest publicly-traded cryptocurrency fund, with hundreds of millions in daily trading volume. It holds approximately 3.4% of all Bitcoins outstanding, and is held by more than 850,000 investors, like me. Finally, a word of warning: in the not too distant future, it’s highly probable that being against Bitcoin will be equivalent to political suicide. I get these signals from milenials, not baby boomers. I’m writing from Florida with gratitude for the opportunity to express my view to you and with the hope and expectation that you will approve this conversion and protect the interest of investors. Sincerely, Rafael Cavalcanti