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Grayscale Investments, a cryptocurrency asset management firm, has submitted three new crypto-centric exchange-traded funds (ETFs) for regulatory approval, while also announcing the establishment of a new entity to oversee its expanding funds.
On May 9, Grayscale disclosed the launch of a new division within its operations — the Grayscale Funds Trust — which enables the firm to manage a variety of its publicly traded financial products internally.
Alongside the new trust, Grayscale announced that it has filed a registration statement with the United States Securities and Exchange Commission (SEC) for three new crypto-oriented ETFs, despite facing prior obstacles from the regulator concerning crypto-related ETFs.
The proposed funds include an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF.
The Global Bitcoin Composite ETF aims to invest in exchange-traded products associated with or supported by Bitcoin (BTC), including companies involved in Bitcoin mining.
In a similar vein, the Ethereum Futures ETF would provide indirect exposure to the prospective future value of Ether (ETH) through shares that track the price of ETH.
The Grayscale Privacy ETF is designed to invest in firms developing blockchain-based privacy technologies, as outlined in the filing.
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NEW TODAY: We’re proud to announce the formation of Grayscale Funds Trust, a Delaware statutory trust structure that enhances our capabilities as a global asset manager.
Investors want and deserve access to future-forward investment opportunities, and Grayscale Funds Trust will… pic.twitter.com/qEeqwWHNSe— Grayscale (@Grayscale) May 9, 2023
None of the three ETFs will be available for public purchase until the SEC approves the registration statement related to Grayscale Funds Trust.
This announcement occurs as Grayscale remains embroiled in an ongoing dispute with the SEC regarding its attempt to convert its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.
Related: GBTC approval could return a ‘couple billion dollars’ to investors: Grayscale CEO
On January 13, Grayscale initiated legal action against the regulator for rejecting its application, contending that the SEC has acted arbitrarily in differentiating between crypto spot traded exchange-traded products and futures products.
1/ As part of our suit challenging the SEC's decision to deny $GBTC conversion to a spot #bitcoin #ETF, @Grayscale just filed our Reply Brief with the DC Circuit Court of Appeals. Here’s what you need to know:
— Craig Salm (@CraigSalm) January 13, 2023
“There is a 99.9% correlation between prices in the Bitcoin futures market and the spot Bitcoin market,” Grayscale asserted in its brief against the SEC.
While the SEC has approved several Bitcoin Futures ETFs — which provide buyers with exposure to the potential future value of BTC — it has consistently rejected all applications for a spot Bitcoin investment product, citing concerns regarding the risk of fraud and market manipulation for investors.
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