Cryptocurrency asset manager Grayscale Investments has proposed three new cryptocurrency-focused exchange-traded funds (ETFs) for approval, and the firm has also announced a new entity to manage its growing fund.
On May 9, Grayscale said it launched a new arm of its business the Grayscale Funds Trust that allows it to manage many publicly traded financial products internally.
In addition to the new trusts, Grayscale also revealed that it has filed registration statements with the SEC for three new cryptocurrency-focused ETFs, despite the regulator's previous hurdles against crypto-related ETFs.
The new funds are an Ethereum Futures ETF, a Global Bitcoin Aggregate ETF, and a Privacy ETF. The Global Bitcoin Aggregate ETF will invest in exchange-traded products related to or backed by Bitcoin, including bitcoin mining companies. Likewise, an Ethereum futures ETFs would allow indirect exposure to the underlying future value of Ether. Through a stock that tracks the price of ETH.
The document explains that the Grayscale Privacy ETF will invest in companies working on blockchain-based privacy technologies. None of the three ETFs will be open for purchase until a registration statement related to Grayscale Funds Trust is approved by the SEC. The announcement comes as Grayscale remains entangled in an ongoing conflict with the US Securities and Exchange Commission over the conversion of its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.
On Jan. 13, Grayscale sued the regulator for rejecting its application, arguing that the SEC indiscriminately treats exchange-traded products for cryptocurrency spot trading differently from futures products. “There is a 99.9% correlation between prices in the bit coin futures market and the spot bitcoin market,” Grayscale said in its briefing to the SEC.
While the SEC has approved some bitcoin futures ETFs -- which give buyers exposure to bitcoin's potential future value -- it has so far rejected all applications for bitcoin spot investment products, citing concerns that investors will face potential fraud and market manipulation.
