May 23, 2022
Dear Ms. Countryman. I am a shareholder who is in favor of approving the Form 19b-4 that NYSE Acra filed with you to convert Grayscale Bitcoin Trust (OTCQX; GBTC) into a Bitcoin Spot ETF. 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. The benefit of converting GBTC into an ETF would allow for simultaneous creations and redemptions, the core feature of the ETF wrapper, and would cause shares trading at a discount to better reflect NAV. In 2021 you approved several futures- based Bitcoin ETFs, which is significant to the extent that the SEC had previously been concerned over fraud and manipulation in pricing the underlying spot/cash Bitcoin markets. This concern would have to permeate across both spot-based and futures-based ETFs since both types of products are priced based on the underlying spot/cash Bitcoin markets. You have approved several future-based Bitcoin ETFs, but subsequently disapproved several spot-based Bitcoin ETFs. This inconsistency creates an unlevel playing field for Bitcoin ETFs without reasonable basis for different treatment. Grayscale's attorneys at Davis Polk have filed a letter in the context of this comment letter arguing that the approval of Bitcoin Futures ETFs but not Bitcoin Spot ETFs, which is what Grayscale would be, is arbitrary and capricious, and therefore a potential violation of the Administrative Procedure Act. I strongly agree with this argument. It is my desire that the SEC should approve GBTC for conversion to an ETF and allow me and other investors choice over which product would best meet our investment needs. I feel to do so otherwise would go against the SEC's core mission of protecting investors. Thanks for your time, Sincerely Larry Smilgys