Renowned cryptocurrency asset manager Grayscale Investments, recently heralded the commencement of a new venture – The Grayscale Funds Trust. This innovative entity has been designed to streamline the firm’s operations by managing many of its publicly traded financial products internally.
Grayscale Secures a Foothold in the Evolving Cryptocurrency Landscape
Simultaneously, Grayscale has taken a significant stride by submitting a registration statement to the United States Securities and Exchange Commission (SEC). This strategic move is for three exchange-traded funds (ETFs), each focusing on a different aspect of cryptocurrency: an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF.
The bold step of registering three new crypto-oriented ETFs denotes Grayscale’s unwavering confidence in the potential growth of cryptocurrency investment products.
The Vision Behind Grayscale’s Diverse Crypto Funds
The company elucidated the purpose of these new ETFs in a statement. The Global Bitcoin Composite ETF is poised to invest in exchange-traded products that relate to or are backed by Bitcoin. The Ethereum Futures ETF, meanwhile, is designed to offer indirect exposure to Ether’s potential future value via shares that shadow ETH’s price.
In contrast, the Grayscale Privacy ETF is slated to invest in companies actively developing blockchain-based privacy technology. However, these three ETFs are pending approval from the SEC and will not be available for public purchase until the registration statement is approved.
Grayscale’s Ongoing Tussle with the SEC
The announcement from Grayscale arrives amidst a continuing dispute with the SEC concerning the conversion of its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.
While the SEC has given the green light to several Bitcoin Futures ETFs, it has consistently denied applications for a spot Bitcoin investment product. The SEC has cited the potential exposure of investors to fraud and market manipulation as reasons for these rejections.
In response, Grayscale lodged a lawsuit against the regulator on January 13, disputing the SEC’s decision. The firm argues that the regulator has been indiscriminate in treating crypto spot traded exchange-traded products compared to futures products. In its brief against the SEC, Grayscale stated that there is a 99.9% correlation between prices in the Bitcoin futures market and the spot BTC market.
Grayscale’s Flagship Product Amid Market Downturn
Despite the broader market downturn, Grayscale’s flagship product, the Grayscale Bitcoin Trust (GBTC), which follows BTC prices, recorded a historical discount of 47.35% to net asset value on February 13. Recently, FTX filed a lawsuit against Grayscale for refusing Bitcoin and Ethereum redemptions.
Grayscale’s progressive initiatives represent a promising new chapter in crypto asset management, offering investors an expanded portfolio of future-forward investment opportunities. With a steadfast belief in the future of cryptocurrency, Grayscale is undeniably setting new benchmarks in the dynamic world of digital asset investment.
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