To optimise the management of some of its investment products, Grayscale has announced the creation of a new structure. In addition to this, the company has filed a registration with the SEC for 3 new ETFs
Grayscale launches Grayscale Funds Trust and expands its ETFs
On Tuesday, Grayscale announced the creation of the Grayscale Funds Trust as a Delaware statutory trust (DST). :
NEW TODAY: We’re proud to announce the formation of Grayscale Funds Trust, a Delaware statutory trust structure that enhances our capabilities as a global asset manager.
Investors want and deserve access to future-forward investment opportunities, and Grayscale Funds Trust will… pic.twitter.com/qEeqwWHNSe– Grayscale (@Grayscale) May 9, 2023
Grayscale Funds Trust will enable the company to manage independently the activities covered by the 1940 Act, a US law that regulates the activities of investment companies and investment advisers.
Michael Sonnenshein, Grayscale’s CEO, spoke of his desire to create a solid regulatory foundation:
“The creation of the Grayscale Funds Trust is a major step forward for Grayscale.
The creation of the Grayscale Funds Trust reflects our commitment to evolve Grayscale’s business in a responsible manner. We are laying the foundations for Grayscale to continue to create and manage regulated, forward-looking products. “
In addition to Grayscale Funds Trust, the company unveiled the filing with the Securities and Exchange Commission (SEC) for 3 new Exchange Traded Funds (ETFs):
- Grayscale Ethereum Futures ETF ;
- Grayscale Global Bitcoin Composite ETF ;
- Grayscale Privacy ETF.
For the time being, the SEC has still refused to approve ETFs for spot trading in cryptocurrencies. However, its reaction to these new products could be different, given that they are based on derivatives.
Indeed, the ETH ETF will be built from Chicago Mercantile Exchange (CME) futures contracts, while the other 2 will track Indxx indices.
Grayscale and crypto
products
During this bear market, Grayscale is experiencing some difficulties, like its parent company Digital Currency Group (DCG), whose Genesis company has faced bankruptcy.
However, Grayscale’s difficulties lie more in its two main investment products, the Grayscale® Bitcoin Trust (GBTC) and the Grayscale® Ethereum Trust (ETHE). The reason for this is that both are traded at a deep discount on the OTC market.
GBTC is trading at $15.66, 37.6% below the $25.13 it is supposed to be worth. The ETHE is even worse, trading at $8.8 instead of $17.99, or 51%.
Despite this depreciation against their benchmark index, DCG itself had to sell stakes in these products to help pay off Genesis’ creditors.
Beyond these difficulties, it will be interesting to follow the development of Grayscale, which is playing its part in bringing cryptocurrencies into the traditional finance sector.
