May. 11, 2022
Dear SEC, I’m writing to support the conversion of Grayscale Bitcoin Trust (Symbol: GBTC), currently the world’s largest Bitcoin fund, to the first Spot Bitcoin ETF in the United States. GBTC is currently trading at a discount to its NAV, which means the price of GBTC is less than the price of the physical asset, Bitcoin. One of the benefits of converting GBTC into an ETF is it would allow for simultaneous creations and redemptions - a code feature of the ETF wrapper. This would cause shares trading at a discount to better reflect NAV, and this will protect the hundreds of thousands of investors currently holding GBTC. Importantly and impressively, in 2021 you approved several futures-based Bitcoin ETFs. This is significant because to the extent the SEC had previously been concerned over fraud or manipulation in pricing of the underlying spot/cash Bitcoin markets, that concern would have to permeate across both spot-based and futures-based ETFs since both types of products are based on the underlying spot/cash Bitcoin markets. However, following approval of several future-based Bitcoin ETFs, you subsequently disapproved several spot-based Bitcoin ETFs. This inconsistency creates an un-level playing field for Bitcoin ETFs without reasonable basis for different treatment. To that point, Grayscale’s attorneys at Davis Polk have filed a letter in the context of this comment letter period arguing that the approval of Bitcoin Futures ETFs but not Bitcoin Spot ETFs, like what GBTC would be, is “arbitrary and capricious,” and therefore a potential violation of the Administrative Procedure Act. Per the above, I strongly agree with this new argument. The SEC should approve GBTC for conversion into an ETF and allow investors a choice over which product best meets their investment needs. To do otherwise would go against the SEC’s core mission of protecting investors. Thank you for your time and consideration of this matter. Sincerely, Heather Mewshaw