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Grayscale Investments set to expand ETF offering in Europe

Grayscale Investments set to expand ETF offering in Europe
TL;DR Breakdown
  • Grayscale is planning to launch a digital assets ETF in the United Kingdom, Italy, and Germany.
  • Grayscale meet with the SEC meeting to argue for the conversion of its flagship fund into an ETF

Grayscale Investments, the world’s largest cryptocurrency asset manager, said on Monday that it will establish an exchange-traded fund (ETF) in Europe made up of firms representing the “Future of Finance.”

The cryptocurrency fund will be established on the London Stock Exchange, Borsa Italiana in Italy, and Deutsche Boerse Xetra in Germany. The ETF dubbed “Grayscale Future of Finance UCITS ETF (ticker: GFOF)” will start trading on 17th May, three months after its debut on the New York Stock Exchange. This is the first time that Grayscale US digital asset manager launches an ETF in Europe.

The index comprises a variety of firms involved in digital currency, including asset managers, exchanges, brokers, technology companies, and firms that directly engage in cryptocurrency mining.

Grayscale Investments first introduced the ETF in February. It was trading at around $14.69 on March 13, down from about $26 on Feb 1, according to a Grayscale tracker. The top three holdings of the index as of March 13 were retail trading platform Robinhood, payments firm PayPal, and fintech firm Block.

Stocks in crypto-related sectors have dropped recently as investors moved away from riskier assets out of concerns about high inflation and significant central bank tightening policy.

Grayscale Bitcoin ETF plan

Grayscale, the asset manager running the world’s largest bitcoin fund, met privately with the Securities and Exchange Commission last week in an effort to persuade regulators to allow its flagship Bitcoin fund to become an ETF.

According to a 24-page presentation obtained by CNBC, turning the Grayscale Bitcoin Trust into an NYSE-traded ETF would expand bitcoin access and provide better protections while unlocking up to $8 billion in value for investors.

That’s because the trust, known by its GBTC ticker, has traded at an average 25% discount to the price of its underlying asset since early 2021, and that discount should vanish after conversion, according to the firm.

Grayscale Investments, founded by CEO Michael Sonnenshein, has been engaged in a high-profile battle to persuade the US regulator to allow the first spot-based bitcoin ETF. The asset manager has seen rivals ProShares obtain approval for futures-based bitcoin exchange-traded funds, suggesting that the SEC is more comfortable with futures-based solutions than bitcoin-based ones.

John Lincoln

John Lincoln

Lincoln contributes blockchain and crypto perspectives that meet the industry's selective information needs in a timely, undiluted fashion. His greatest wish is to share transformational technology through an engaging and easy-to-read style, making complex topics accessible to all.

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