May. 14, 2022
I invested in GBTC to get exposure to Bitcoin in IRA accounts that are not easily able to buy actual bitcoin. Since that time, GBTC has started trading at a huge discount to the underlying value of the bitcoin it holds. This discount could be resolved if GBTC was converted to an ETF and the fund was allowed sell or buy the underlying bitcoin and/or ETF shares to bring the values back into parity. I understand why the SEC has said it will not permit the conversion to an ETF… because bitcoin trades on exchanges that are not regulated. That’s why only Futures-based ETFs are permitted… because bitcoin futures trade on a regulated exchange. However, this is deeply flawed logic. This has not protected investors, as noted by the enormous discount that GBTC trades at relative to underlying fair value of the bitcoin it holds. Even if nefarious trading happens on the exchanges on which bitcoin trades, preventing GBTC from being able to convert to an ETF and resolve its trade discount HAS NOT PROTECTED INVESTORS. I do not think you can show that MORE harm would come to GBTC investors if GBTC was allowed to be converted to an ETF… than the harm that has already occurred to GBTC investors through the trade discount. People who invest in GBTC want exposure to Bitcoin… with all the risk that we know goes with that. Please allow GBTC to be converted to an ETF so GBTC can accurately reflect the underlying value of the bitcoin it holds. I want GBTC to be allowed to convert to a spot ETF. Regards, Brian BIlnoski