You, of course, have been speaking here today and you've been spoken about today
a few times, especially your court victory against the FCC when it came to
your attempt to convert GBTC into that spot ETF.
Where do you stand now? What happens next?
You have to refile. What does the FCC told you?
Well, it's great to be here and it's great to be here at DC FinTech Week and
great that crypto is such a hot topic of conversation amongst everybody.
It has been an unbelievable year at grayscale.
And we just first have to say thank you to our investors, our service providers,
everybody that's been supporting us throughout the court process.
Couple of months ago, a decision did come out of the D.C.
Circuit that did vacate the SEC's denial of the gbtc up listing to a spot Bitcoin
ETF on the New York Stock Exchange. We really respected and continue to
respect the court process. There was a period of time after that
during which the FCC could have challenged that decision.
They in fact did not. And so what you've seen now over the
last few weeks is our team putting in the appropriate filings in front of the
SCC, including our S-3 filing that now really allows us to continue to have a
constructive dialogue with the FCC, with all the required documents that would
support us moving towards that up listing on NYSE.
Have they suggested that this dialogue may soon be coming to a close?
What what kind of timeline are we dealing with here?
So timelines are certainly not something that has been discussed.
But what I can tell you is that the SEC is constructively engaging at the
moment, both with having our S-3 in front of the SEC, which has been really
a really nice advantage for grayscale in the sense that grayscale Bitcoin Trust
Gbtc has already been a well-known, seasoned issuer for several years now,
which gives us the ability to file and has three.
That's compared to some of the other issuers who have had to file S-1.
They don't have a product yet or investors or trading history.
And so we are continuing to have that dialogue with the SEC, and we remain
optimistic that we will get through any final hurdles that need to be there and
our investors will finally get what they've been waiting for very patiently.
So the way things are trending, it doesn't seem like grayscale is going to
have to say through the SEC again. Well, I've never say never.
But what I can say is that every day we wake up, my team wakes up.
We are always trying to do everything we can on behalf of our investors.
This is what they want and this is the primary focus for the team.
I know you can't get into too much specific on the timeline, but just in
terms of sequencing, do you are you concerned that by the time grayscale
will actually be able to convert you BTC into a spot ETF that there already will
have been other spot ETFs approved? Do you think there's a real risk of that
happening? Well, I think I would actually frame my
answer in a different way. I would start out by saying number one,
grayscale as a team is operationally ready.
Today. We've been operationally ready to
operate GBTC as an ETF and we've certainly made that very well known to
the SCC. We think it's fantastic that there are
other issuers that are also trying to launch products.
We've Welborn and long been prepared for a world in which there are multiple spot
Bitcoin products the same way that there are multiple Bitcoin futures products.
That being said, you know, investors have been patient, so we can't have them
waiting too, too long because of course Gbtc continues to trade every day.
Investors are actively, you know, getting involved in Bitcoin.
Further coming out of this crypto winter, you are seeing investor
propensity to want to continue to allocate towards crypto and the
protections of a Bitcoin ETF we think would be a really, really important
milestone towards that. So it seems like you think there's
really room for everyone here, at least there's room for a lot of you when it
comes to spot ETFs. But there can be a competitive aspect
when it comes to fees. I know you're you will have to drop
below 2%, right? How are you thinking about that or are
you going to wait for other issuers to set a fee first before making up your
mind on that? What are you thinking?
Well, so I've been on Bloomberg many times talking with a bunch of your
colleagues, in fact, about fees, because they do seem to be in focus.
We will be reducing fees when Gbtc up listed the New York Stock Exchange.
I've committed to that before. I'm happy to commit to that again today.
What I do think will be interesting is how investors make the choices they do
about the products that they're going to be engaging with for their Bitcoin
exposure. We at grayscale certainly hold ourselves
out to be a crypto specialist, a company that has had a near decade or actually a
little bit over a decade now operational track record of success.
We've developed the risk disclosures and the frameworks and operated inside the
regulatory confines that we find ourselves in today, working
collaboratively with the SCC. And it really paved the way for not only
our investors to get access to Bitcoin, but now for even other issuers to come
to market making use of those very same disclosures.
And we do believe that there will be other products on market, but really
having that crypto specialty and being a crypto specialist I do think is a
differentiating factor. Not to mention Gbtc is the largest
Bitcoin fund in the world. It has nearly a million investors.
It trades hundreds of millions of dollars daily.
And that liquidity profile and that track record, I certainly is something
that I think investors will be attracted to.
So they might be willing to pay a premium to another product for
essentially what your. Okay.
Interesting. You've mentioned before, as you say,
you've come on Bloomberg many times about everything that I've been able to
convert to a spot ETF would open up. There's been so much hype and buildup
already. Those prices have certainly run very
far. As Matt was just outlining.
We've seen that discount closing for for gbtc compared to the underlying assets.
Is that also baked in? I mean, what happens the next day if it
finally does happen? You know, I love this question because
it's a really important point for me to emphasize to all Gbtc holders today or
who may become BTC holders when Gbtc uplifts in the New York Stock Exchange,
there's nothing that investors are going to need to do.
One day Gbtc will be quoted on the OTC market and then on the day that we
announced its up listing to NYSE, it'll still be in their brokerage account.
It'll carry the same GBTC ticker and they'll be able to trade it like they
did Gbtc the day before. So in that sense it may be uneventful,
but what will be fantastic about that is that it will allow Gbtc to be within the
ETF wrapper, have the ability to have creations and redemptions.
That embedded mechanism that can happen simultaneously, that keeps ETFs trading
in line with their underlying assets and would eliminate premiums and discounts
of the shares compared to the bitcoin it holds.
Okay, so we're all still waiting for this conversion to happen.
That aside, what else should we expect from grayscale in the coming year?
Well, I think it's been a year for us to build on.
Every time we've gone to a crypto winter or grayscale.
This is our third crypto winter. We've used it as a time to really think
about what else should we be piloting, what else should we be thinking about?
So our team has not only finished building out the operational
infrastructure of grayscale, our own RIA, our own broker dealer, our own
series Trust, but have also begun to pilot other types of investment
vehicles. We want to continue to innovate in terms
of the exposure we're giving investors as well as the wrappers we're giving to
investors. So I don't want to give too much away
yet, but we are continuing to innovate and work on some new things.
All right. Well, when you have news to share with
us, I hope you come back. I will come back.