Grayscale rolls out an ETF that tracks shares of firms involved with BTC

on Feb 2, 2022
  • The Future Finance ETF tracks shares of 22 firms, including PayPal and Coinbase.
  • Grayscale chose to launch this ETF because the future of finance demands a broader mandate.
  • This ETF launch comes after the SEC rejected Grayscale’s application for a spot BTC ETF.

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Leading crypto asset management firm Grayscale Investments has rolled out an exchange-traded fund (ETF) that comprises shares of 22 public companies that are deeply vested in the crypto space.

A report unveiled this news earlier today, noting that the product is dubbed Future Finance ETF and comprises shares of companies like PayPal, Block, Coinbase, and Silvergate Capital, among others.

According to the report, the Future Finance ETF does not comprise shares of firms like electric vehicle manufacturer Tesla despite the firm investing $1.50 billion (£1.10 billion) in Bitcoin (BTC/USD) in the past year. MicroStrategy, which has accumulated over 120,000 BTC, also failed to pass muster.

A Grayscale spokesperson pointed out that the company did not include firms that hold the flagship cryptocurrency on their balance or accept it as a means of payment.

Explaining why the company decided to branch out and launch an ETF that tracks the traditional stock market instead of maintaining its focus on crypto, Grayscale CEO Michael Sonnenshein said,

While Grayscale has established itself as a global leader in digital currency investing, the future of finance demands a much broader mandate.

Reportedly, the Future Finance ETF will trade on New York Stock Exchange under the ticker symbol GFOF. However, it is worth noting that Grayscale Investments is not the first company to roll out such an ETF. In October 2021, a company titled Volt launched a similar product dubbed Volt Bitcoin Revolution ETF.

SEC continues rejecting ETFs based on BTC’s spot market

Grayscale’s decision to venture into the traditional NFT comes as the company is locked in battle with the US Securities Exchange Commission (SEC) after the agency rejected its application for a spot market BTC ETF.

The company has suggested that it might sue the agency for rejecting its proposal, arguing that the SEC approved a more complicated version of a BTC ETF tied to its derivatives market.

These events have negatively impacted the price of Grayscale’s GBTC fund, which holds billions of dollars in BTC. While the trusts’ shares should theoretically track BTC’s price, they have been performing poorly than the cryptocurrency in recent weeks, with the stock plunging 25%.

At the time of writing, GBTC is trading at $25.58 after changing hands at $25.48 (£18.77) after losing 3.01% in the day. While experts believe the price might bounce back after the SEC reverses its course, it is unlikely that the agency will do this, seeing as it continues emphasizing the importance of consumer protection.