Bitcoin asset manager Grayscale Investments recently announced the creation of a new division, Grayscale Funds Trust, which will allow the company to manage publicly traded financial products internally. In addition, the company has filed a registration statement with the US Securities and Exchange Commission (SEC) for the approval of three new exchange-traded funds (ETFs).
The proposed ETFs include Ethereum Futures ETF, Global Bitcoin Composite ETF, and Privacy ETF. The Global Bitcoin Composite ETF will invest in exchange-traded goods based on or backed by Bitcoin, such as Bitcoin mining companies. Similarly, the Ethereum Futures ETF will offer indirect exposure to the future value of Ethereum through stocks that track the price of ETH. The Grayscale Privacy ETF, on the other hand, will invest in blockchain-based privacy technology businesses.
Grayscale’s decision to launch the new ETF comes amid a legal battle with the SEC over the conversion of the $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. Grayscale filed a lawsuit against the regulatory agency after its application was rejected, arguing that the SEC had treated its crypto exchange-traded products and futures products differently without sufficient reason. According to Grayscale’s complaint, prices in the spot and futures markets for bitcoin correlate 99.9%.
While the SEC has so far rejected every application for a spot Bitcoin investment product, it has approved several Bitcoin Futures ETFs. The regulatory body has expressed concern about the potential for fraud and market manipulation, which it believes poses risks to investors.
Despite the ongoing legal dispute, Grayscale remains committed to expanding its range of crypto investment products. The new ETF, if approved, will provide investors with additional ways to gain exposure to the crypto market. However, none of the three ETFs will be offered for sale to the general public until the SEC approves a registration statement relating to the Grayscale Funds Trust.
Grayscale Investments’ proposal for three new crypto-focused ETFs and the creation of a Grayscale Funds Trust division are significant developments in the company’s quest to expand its portfolio of investment products. While the SEC’s rejection of Grayscale’s previous application of spot Bitcoin ETFs poses challenges, the company’s decision to focus on futures and privacy-focused ETFs could provide new investment opportunities for crypto enthusiasts. It remains to be seen how the regulatory body will respond to Grayscale’s latest submission, but if approved, the new ETF could have a significant impact on the crypto market.