Bitcoin asset manager Grayscale Investments has recently announced the establishment of a new division, the Grayscale Funds Trust, which will allow the firm to manage its publicly traded financial products internally. In addition, the company has filed a registration statement with the US Securities and Exchange Commission (SEC) for approval of three new exchange-traded funds (ETFs).
The proposed ETFs include an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF. The Global Bitcoin Composite ETF would invest in exchange-traded goods based on or supported by Bitcoin, such as Bitcoin mining companies. Similarly, the Ethereum Futures ETF would offer indirect exposure to the future value of Ethereum through shares that track the price of ETH. The Grayscale Privacy ETF, on the other hand, would invest in blockchain-based privacy technology businesses.
Grayscale’s decision to launch the new ETFs comes amidst a legal dispute with the SEC over the conversion of its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. Grayscale filed a lawsuit against the regulatory body after its application was rejected, arguing that the SEC had treated crypto spot traded exchange-traded products and futures products differently without adequate reason. According to Grayscale’s complaint, the prices on the spot and futures markets for bitcoin were 99.9% correlated.
While the SEC has so far rejected every application for a spot Bitcoin investment product, it has approved several Bitcoin Futures ETFs. The regulatory body has expressed concerns about potential fraud and market manipulation, which it believes could pose a risk to investors.
Despite the ongoing legal dispute, Grayscale remains committed to expanding its range of crypto investment products. The new ETFs, if approved, would provide investors with additional ways to gain exposure to the crypto market. However, none of the three ETFs will be offered for sale to the general public until the SEC approves the registration statement pertaining to Grayscale Funds Trust.
Grayscale Investments’ proposal for three new crypto-focused ETFs and the establishment of the Grayscale Funds Trust division is a significant development in the company’s efforts to expand its portfolio of investment products. While the SEC’s rejection of Grayscale’s previous application for a spot Bitcoin ETF poses a challenge, the firm’s decision to focus on futures ETFs and privacy-focused ETFs could provide new investment opportunities for crypto enthusiasts. It remains to be seen how the regulatory body will respond to Grayscale’s latest filing, but if approved, the new ETFs could have a significant impact on the crypto market.
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