Grayscale Wants You to Convince the SEC to Approve Its Bitcoin Spot ETF

By Tim Hakki

Crypto asset manager Grayscale–which stewards $43 billion in cryptocurrencies–has reportedly launched a marketing campaign asking people "to advocate for a Bitcoin ETF" to the United States Securities and Exchange Commission (SEC). 

According to initial reporting from Axios, a Grayscale advert appeared in Washington D.C.'s Union Station, saying "we care about crypto investors," and included a QR code that takes people to a page where they can submit comments to the SEC.

Decrypt has confirmed with Grayscale that the QR code directs users to submit comments to the SEC. 

Grayscale's vice president of communications Jennifer Rosenthal also told Decrypt that this advertising campaign was launched in April and will end in July. Besides the Union Station location, Rosenthal said that the campaign is also running in various newspapers, including the New York Times, Wall Street Journal, and The Washington Post.

She added that the ads also appear on Amtrak trains and NYC bus links and will soon appear on MTA live boards and in airport lounges.

Grayscale's campaign is part of its larger ambition to finally see a Bitcoin spot exchange-traded fund (ETF) approved by the SEC. 

The federal securities regulator has so far rejected every spot ETF application. Still, Grayscale is hoping its advertising and industry clout will return a different verdict from the SEC on July 6.

The application process is now in an open review period, so anyone can submit comments to the SEC for consideration. 

Reportedly, over 2,600 comments have been submitted so far.

Why Grayscale wants an ETF

Currently, in the absence of ETFs, products like Grayscale's Bitcoin and Ethereum Trusts offer investors regulated exposure to crypto through traditional investment platforms, with publicly quoted prices, legal counselors and auditors.

Despite the 2% management fee to invest in crypto, Grayscale's products have still attracted investors. Its flagship offering, the Bitcoin Trust (GBTC), currently holds $18.7 billion 

A crypto ETF would present a cheaper alternative to the management fees of crypto trusts. It would also help Grayscale repeg its Bitcoin Trust to the actual price of the underlying asset.

Last month, shares of GBTC hit record lows against its net asset value (NAV). It currently trades at a 30.72% discount, according to data from YCharts, although it has historically traded at an average premium of 37%. 

In October 2021, Grayscale formally filed an application to convert its flagship Bitcoin Trust (GBTC) into a Bitcoin Spot ETF.

Should the SEC approve the conversion of GBTC to a Bitcoin Spot ETF, Grayscale says an arbitration mechanism would be activated through the availability of simultaneous share creations and redemptions, likely realigning GBTC share prices to trade in line with NAV.

Should the SEC deny Grayscale's Bitcoin ETF application, Rosenthal told Decrypt that "all options are on the table, and we will always advocate on behalf of our investors."

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