Coinbase Backs NYSE Arca’s Push for Grayscale Bitcoin Trust Conversion to ETF

Coinbase says there’s no “rational basis” for not allowing a spot-based exchange-traded product.

Dec 15, 2021 at 9:51 p.m. UTC
Updated Dec 15, 2021 at 11:15 p.m. UTC

In a letter to the U.S. Securities and Exchange Commission (SEC) on Tuesday, Coinbase urged the agency to approve NYSE Arca’s application to convert the Grayscale Bitcoin Trust into an exchange-traded fund (ETF).

  • “We believe investors should have access to GBTC in an ETP [exchange-traded product] format because it offers a tried and tested way for retail investors to gain exposure to bitcoin at prices that closely reflect spot bitcoin trading prices without holding it themselves,” the letter said. Grayscale Investments is a digital asset management firm owned by Digital Currency Group, which also owns CoinDesk.
  • Coinbase’s chief legal officer, Paul Grewal, highlighted the company’s position in a series of Tweets Wednesday.
  • ”What’s right is right,” Grewal wrote, continuing, “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.”
  • ”ETPs reduce discrepancies between trading market prices and underlying asset values through continuous share redemptions and creations. What could do more to advance both the public interest and the Commission’s mission to protect investors?” Grewal added in a tweet.
  • Coinbase has been vocal about its disagreement with the SEC over the crypto exchange’s lending product.
  • Grayscale Investments filed its application to convert its trust into a spot bitcoin ETF on Oct. 19.

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Michael Bellusci is CoinDesk's crypto payments reporter.