Grayscale Investments has filed three new funds with the regulators, showing its plans to bring new crypto-based products to market, including a bitcoin tracking ETF, Ethereum futures ETF, and a privacy-focused fund. Grayscale’s main product, the Grayscale Bitcoin Trust (GBTC), is still awaiting a court ruling to convert it into an ETF after the US Securities and Exchange Commission (SEC) initially blocked the proposal. Despite filing for new funds, there is no guarantee that they will get approved in the United States.
If the plans go forward, Grayscale aims to create a Global Bitcoin Composite ETF that would track the performance of exchange-traded products that hold or are backed by physical bitcoin and include bitcoin mining companies. Bloomberg Intelligence analyst Eric Balchunas called this proposed fund a “semi-spot bitcoin ETF” in his tweet.
For Ethereum, Grayscale plans to launch a fund that will offer “actively-managed exposure to ethereum futures contracts.” The United States has not yet approved ether futures funds, although bitcoin futures ETFs were first launched in October 2021.
Finally, the Grayscale Privacy ETF aims to invest in companies that are developing blockchain-based privacy solutions. According to the filing, it will also put capital to work in digital assets that strive to ensure more private and secure transactions by obfuscating user identities and transaction details.
In a statement to Blockworks, a Grayscale spokesperson said, “Grayscale remains committed to scaling our business responsibly. Our goal is to continuously improve, streamline, and modernize our clients’ investment experience.”
Grayscale Funds Trust, a new Delaware-domiciled trust structure, has been developed to encompass Grayscale’s ETF products if they achieve regulatory approval. Grayscale CEO Michael Sonnenshein stated that the formation of the Grayscale Funds Trust “enhances our capabilities as a global asset manager” and reflects the company’s dedication to expanding their business responsibly.
Grayscale hopes to “continue creating and managing regulated, future-forward products” with the new trust structure, added Sonnenshein.
The move to file these new funds comes amid an ongoing legal battle between Grayscale and the SEC over GBTC’s approval to become a proper ETF. The SEC had cited concerns that the product could lead to price manipulation, market disruption, and other issues. Grayscale believes that converting GBTC into an ETF is its best path forward to give investors more transparent pricing, liquidity, and flexibility.
Despite the regulatory uncertainty surrounding these new filings, approving these funds could pave the way for more institutional investors to enter the crypto space and diversify their portfolios. ETFs are widely considered a more accessible way of investing in crypto compared to direct ownership or dealing with complex futures contracts.
Even if Grayscale is ultimately unsuccessful in getting these new funds approved, the mere act of filing for them indicates the asset manager’s intent to push forward and expand its offerings in the digital asset space.
