Grayscale Investments, a cryptocurrency asset manager, has announced the launch of a new entity to manage its growing funds. The new arm of its business, the Grayscale Funds Trust, will allow the company to manage many of its publicly traded financial products in-house. In addition to the new trust, Grayscale has filed a registration statement with the US Securities and Exchange Commission (SEC) for three new crypto-focused exchange-traded funds (ETFs). The funds would invest in a wide range of different crypto-related assets including Bitcoin miners and privacy tech. The new ETFs are the Ethereum Futures ETF, the Global Bitcoin Composite ETF, and the Privacy ETF.
The Global Bitcoin Composite ETF would invest in exchange-traded products that are related to or backed by Bitcoin (BTC), including Bitcoin mining firms. Similarly, the Ethereum futures ETF would allow an indirect exposure to the potential future value of Ether (ETH) by way of shares that track ETH’s price. The Grayscale Privacy ETF would invest in companies working on blockchain-based privacy technology, the filing explains.
However, until the registration statement relating to Grayscale Funds Trust is approved by the SEC, none of the three ETFs will be available for public purchase. The announcement comes as Grayscale is still entangled in an ongoing conflict with the SEC over converting its $17bn Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product. On Jan. 13, Grayscale sued the regulator for denying its application, arguing the SEC acted indiscriminately in treating crypto spot traded exchange-traded products differently from futures products. “There is a 99.9% correlation between prices in the Bitcoin futures market and the spot Bitcoin market,” Grayscale stated in its brief against the SEC.
While the SEC has approved a number of Bitcoin Futures ETFs, which expose buyers to the potential future value of BTC, 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 CEO Michael Sonnenshein has previously said that approval of a GBTC ETF could return a “couple billion dollars” to investors.
Grayscale Investments is a subsidiary of Digital Currency Group, which owns CoinDesk.