Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Database
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
    • ETFs Future-Forward 2021: An iShares Investing Symposium
    • Three Themes for 2021: An iShares & MSCI Investing Symposium
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Crypto Channel
  2. Coinbase Supports GBTC Conversion
Crypto Channel
Share

Coinbase Supports GBTC Conversion

Evan HarpFeb 17, 2022
2022-02-17

Coinbase has written a letter to the SEC supporting the conversion of the Grayscale Bitcoin Trust (GBTC) into an ETF. The conversion is currently in the comment period, where members of the public are allowed to weigh in on the matter.

The letter makes a number of arguments in favor of the conversion. Noting that GBTC offers a tried-and-true way for retail investors to gain exposure to bitcoin, Coinbase makes the case that the ETP vehicle should be allowable, especially considering that a futures-based product exists. The letter states, “section 6(b)(5) forbids exchanges from maintaining rules that unfairly discriminate between issuers. We are of the view that a rejection of Arca’s proposal would be in direct conflict with Section 6(b)(5) of the Exchange Act. As noted in Arca’s proposal, the reference rate used to price Bitcoin contracts underlying futures-based ETPs is subject to the same pricing quality risks as the index used to price spot Bitcoin and calculate net-asset value in spot ETPs.”

Coinbase’s support is notable because as a bitcoin exchange, it stands to potentially lose revenue should a spot bitcoin ETF garner approval. Exchanges like Coinbase currently benefit from being one of the only ways for investors to gain exposure to bitcoin and cryptocurrency in general. An ETF wrapper would offer retail investors a simple alternative form of access, potentially cutting into the income that Coinbase generates through transaction fees.

In a series of Tweets last December, Coinbase chief legal officer Paul Grewal outlined the company’s stance. “What’s right is right,” Grewal wrote. “Good on the SEC for permitting futures-based ETPs. But there is no rational basis for disallowing a spot-based ETP while allowing a futures-based ETP – both are reliant on bitcoin’s underlying price.”

Grayscale filed for the conversion in October of 2021. In December, Grayscale also made noise when it prepared to sue the SEC with a pre-action letter arguing that the SEC’s decision to allow a futures ETF but not a spot bitcoin one is “arbitrary and capricious.” Traditionally, derivatives like futures have been considered less safe than holding an asset directly, but bitcoin runs counter to that. The SEC has shot down several spot ETFs but approved futures-based products.

Interested people can follow these directions to submit comments to the SEC by February 25th, when comments close.

For more news, information, and strategy, visit the Crypto Channel.

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

Equity ETF Channel

Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead?

Debbie CarlsonOct 22, 2020
2020-10-22

With the 10-year U.S. Treasury yield hovering below 1% and Federal Reserve Chairman Jerome Powell...

Equity ETF Channel

Portfolio Diversification Isn't Dead, It Was Just Sleeping

Debbie CarlsonOct 15, 2020
2020-10-15

Investors could be forgiven to think there was no reason to invest outside of the U.S. for the...

}
X