Cryptocurrency asset manager Grayscale Investments has 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
Grayscale has filed a registration statement with the United States Securities and Exchange Commission (SEC) for three new crypto-focused exchange-traded funds (ETFs), which are an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF. This move suggests that the firm is still optimistic about 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 press release. The Grayscale Privacy ETF would invest in companies working on blockchain-based privacy technology. However, these ETFs will not be available for public purchase until the SEC approves the registration statement.
Grayscale’s announcement comes while the firm is still in a conflict with the SEC over converting its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.
Tussle Over Spot Bitcoin ETF
The SEC has approved several Bitcoin Futures ETFs but has rejected every application thus far 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. Recently, FTX sued Grayscale for refusing Bitcoin and Ethereum redemptions. 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.
During the broader market downturn, Grayscale’s flagship product Grayscale Bitcoin Trust (GBTC), which tracks BTC prices, reached a record discount of 47.35% to net asset value on February 13.