Grayscale Investments has swiftly moved to diversify its offerings, filing for a covered call ETF just a day after gaining approval from the Securities and Exchange Commission for its spot bitcoin ETF. The Grayscale Bitcoin Trust Covered Call ETF aims to generate income while allowing investors to participate in the price return of the Grayscale Bitcoin Trust, as outlined in a Form N-1A submitted on Thursday.
Notably, the fund will refrain from direct investments in digital assets, as detailed in the filing. Nate Geraci, President of The ETF Store, expressed his anticipation, stating, ‘And so it begins…’ in a post on X. The ETF will actively manage exposure to GBTC, engaging in the buying and selling of call and put options using GBTC as the reference asset. This move is expected to pave the way for various iterations of spot bitcoin ETFs.
GBTC Conversion Spurs Grayscale’s Bitcoin Covered Call ETF Filing
This development unfolded shortly after the debut of Grayscale’s spot bitcoin ETF, GBTC, which commenced trading along with 10 other ETFs on Thursday morning. The combined trading volume for these products exceeded $4 billion as of the afternoon. Grayscale’s ETF took the lead, boasting over $1.9 billion in trading volume as of 3:02 p.m. ET, according to data from Yahoo Finance compiled by The Block. BlackRock and Fidelity’s ETFs secured the second and third positions with $942 million and $628 million in trading, respectively.
Analysts have observed that a substantial portion of the GBTC volume may represent outflows, with shareholders either capitalizing on profits or transitioning to funds with lower fees.
An unprecedented step in the financial landscape
On Wednesday, the Securities and Exchange Commission (SEC) granted approval to 11 spot bitcoin ETFs, with SEC Chair Gary Gensler casting a favorable vote for the products.
This decision follows a pivotal moment earlier in the summer when three judges in a D.C. court mandated that the SEC reevaluate a proposal from Grayscale Investments for a spot bitcoin ETF. In response, Gensler emphasized the need to progress, stating in a released statement on Wednesday, ‘Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.’
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