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Grayscale Launches New Entity to Manage Funds, Eyes Expansion of ETF Offerings

AA News - Arun Srivastav 2023-05-11 12:45

Cryptocurrency asset manager Grayscale Investments announced the launch of The Grayscale Funds Trust.

The new entity will allow the firm to manage many of its publicly traded financial products in-house.

Bullish on Crypto’s Future

In addition, Grayscale has filed a registration statement with the United States Securities and Exchange Commission (SEC) for three new crypto-focused exchange-traded funds (ETFs). These are an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF.

Grayscale’s move to file registration statements for three new crypto-focused ETFs suggests that the firm is still bullish on the future of cryptocurrency investment products.

“Investors want and deserve access to future-forward investment opportunities, and Grayscale Funds Trust will allow us to expand our offerings as we build our ETF franchise under @Dave_LaValle,” Grayscale said in its statement on Twitter.

ETF Expansion Plans

The Global Bitcoin Composite ETF would invest in exchange-traded products related to or backed by Bitcoin while the Ethereum futures ETF would provide indirect exposure to the potential future value of Ether through shares that track ETH’s price, the company said in a PR.

The Grayscale Privacy ETF, on the other hand, would invest in companies working on blockchain-based privacy technology. However, until the SEC approves the registration statement, none of the three ETFs will be available for public purchase.

The announcement by Grayscale comes as the firm is still embroiled in an ongoing conflict with the SEC over converting its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.

Tussle Over Spot Bitcoin ETF

While the SEC has approved several Bitcoin Futures ETFs, it has so far rejected every application for a spot Bitcoin investment product, citing concerns about exposing investors to potential fraud and market manipulation.

Grayscale sued the regulator on January 13 for denying its application, arguing that the SEC acted indiscriminately in treating crypto spot traded exchange-traded products differently from futures products. Grayscale stated in its brief against the SEC that there is a 99.9% correlation between prices in the Bitcoin futures market and the spot BTC market.

Amid the broader market downturn, Grayscale’s flagship product Grayscale Bitcoin Trust (GBTC), which tracks BTC prices, hit a record discount of 47.35% to net asset value on February 13. Recently, FTX sued Grayscale for refusing Bitcoin and Ethereum redemptions.

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