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Speaker 1: Michael Sunshine is joining me now here from DC Fintech Week,

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Speaker 1: of course, is the CEO of Grayscale Investments. Michael. Great

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Speaker 1: to see you. You, of course have been speaking here today,

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Speaker 1: and you've been spoken about today a few times, especially

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Speaker 1: your court victory against the SEC when it came to

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Speaker 1: your attempt to convert GBTC into that spot ETF. Where

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Speaker 1: do you stand now? What happens next? Do you have

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Speaker 1: to refile? What has the SEC told you?

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Speaker 2: Well, it's great to be here, and it's great to

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Speaker 2: be here at DC Fintech Week, and great that crypto

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Speaker 2: is such a hot topic of conversation amongst everybody. It

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Speaker 2: has been an unbelievable year at Grayscale, and we just

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Speaker 2: first have to say thank you to our investors, our

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Speaker 2: service providers, everybody that's been supporting us throughout the court process.

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Speaker 2: A couple months ago, a decision did come out of

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Speaker 2: the DC Circuit that did vacate the SEC's denial of

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Speaker 2: the GBTC uplisting to a spot at TWENTYTF on the

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Speaker 2: New York Stock Exchange. We really respected and continue to

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Speaker 2: respect the court process. There was a period of time

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Speaker 2: after that during which the SEC could have challenged that decision,

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Speaker 2: they in fact did not, And so what you've seen

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Speaker 2: now over the last few weeks is our team putting

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Speaker 2: in the appropriate filings in front of the SEC, including

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Speaker 2: our S three filing that now really allows us to

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Speaker 2: continue to have a constructive dialogue with the SEC with

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Speaker 2: all the required documents that would support us moving towards

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Speaker 2: that uplisting on NYC.

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Speaker 1: Have they suggested that this dialogue may soon be coming

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Speaker 1: to a close. What kind of timeline are we dealing

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Speaker 1: with here?

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Speaker 2: So timelines are certainly not something that has been discussed,

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Speaker 2: but what I can tell you is that the SEC

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Speaker 2: is constructively engaging at the moment, both with having our

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Speaker 2: S three in front of the SEC, which has been

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Speaker 2: really a really nice advantage for Grayscale in the sense

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Speaker 2: that Greyscale Bitcoin Trust GBTC has already been a well known,

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Speaker 2: seasoned issuer for several years now, which gives us the

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Speaker 2: ability to file a S three as compared to some

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Speaker 2: of the other issuers who have had to file S

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Speaker 2: ones they don't have a product yet or investors or

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Speaker 2: trading history. And so we're continuing to have that dialogue

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Speaker 2: with the SEC, and we've remain optimistic that we'll get

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Speaker 2: through any final hurdles that need to be there and

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Speaker 2: our investors will finally get what they've been waiting for

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Speaker 2: very patiently.

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Speaker 1: So the way things are trending, it doesn't seem like

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Speaker 1: Grayscale is going to have to say sue the SEC again.

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Speaker 2: Well, I'd never say never, But what I can say

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Speaker 2: is that every day we wake up, my team wakes up,

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Speaker 2: we are always trying to do everything we can on

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Speaker 2: behalf of our investors. This is what they want, and

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Speaker 2: this is the primary focus for the team.

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Speaker 1: I know you can't get into too much specific on

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Speaker 1: the timeline, but just in terms of sequencing do you

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Speaker 1: have Are you concerned that by the time Grayscale will

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Speaker 1: actually be able to convert GBTC into a SPOT ETF,

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Speaker 1: that there already will have been other spot ETFs approved.

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Speaker 1: Do you think there's a real risk of that happening.

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Speaker 2: Well, I think I would actually frame my answer in

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Speaker 2: a different way. I would start out by saying, number one,

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Speaker 2: gray Scale as a team is operationally ready. Today we've

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Speaker 2: been operationally ready to operate GBTC as an ETF, and

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Speaker 2: we've certainly made that very well known to the SEC.

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Speaker 2: We think it's fantastic that there are other issuers that

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Speaker 2: are also trying to launch products. Been and long been

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Speaker 2: prepared for a world in which there are multiple spot

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Speaker 2: bitcoin products, the same way that there are multiple bitcoin

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Speaker 2: futures products. That being said, you know, investors have been patient,

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Speaker 2: so we can't have them waiting too too long. Because

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Speaker 2: of course GBTC continues to trade every day. Investors are

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Speaker 2: actively you know, getting involved in bitcoin. Further, coming out

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Speaker 2: of this crypto winter, you are seeing investor propensity to

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Speaker 2: want to continue to allocate towards crypto and the protections

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Speaker 2: of a bitcoin ETF. We think would be a really

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Speaker 2: really important milestone towards that.

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Speaker 1: So it seems like you think there's really room for

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Speaker 1: everyone here. At least there's room for a lot of

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Speaker 1: you when it comes to spot ETFs. But there can

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Speaker 1: be a competitive aspect when it comes to fees. I

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Speaker 1: know you're you will have to drop a low two percent, right,

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Speaker 1: How are you thinking about that? Are you going to

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Speaker 1: wait for other issuers to set a fee first before

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Speaker 1: making up your mind on that? What are you thinking?

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Speaker 2: Well, so I've been on Bloomberg many times talking with

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Speaker 2: a bunch of your colleagues in fact about fees because

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Speaker 2: they do seem to be in focus. We will be

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Speaker 2: reducing fees when GBTC uplists to the New York Stock Exchange.

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Speaker 2: I've committed to that before. I'm happy to commit to

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Speaker 2: that again today. What I do think will be interesting

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Speaker 2: is how investors make the choices they do about the

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Speaker 2: products that they're going to be engaging with for their

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Speaker 2: bitcoin exposure. We at Gray Scales certainly hold ourselves out

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Speaker 2: to be a crypto specialist, a company that has had

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Speaker 2: a near decade or actually a little bit over a

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Speaker 2: decade now operational track record of success. We've developed the

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Speaker 2: risk disclosures and the frameworks and operated inside the regulatory

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Speaker 2: confines that we find ourselves in today, working collaboratively with

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Speaker 2: the SEC, and it really paved the way for not

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Speaker 2: only our investors to get access to bitcoin, but now

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Speaker 2: for even other issuers to come to market making use

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Speaker 2: of those very same disclosures. And we do believe that

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Speaker 2: there will be other products on market. But really having

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Speaker 2: that crypto specialty and being a crypto specialist, I do

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Speaker 2: think is a differentiating factor. Not to mention, gbtc's the

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Speaker 2: largest bitcoin fund in the world, It has nearly a

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Speaker 2: million investors, it trades hundreds of millions of dollars daily,

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Speaker 2: and that liquidity profile in that track record, I certainly

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Speaker 2: is something that I think investors will be attracted to.

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Speaker 1: So they might be willing to pay a premium to

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Speaker 1: another product is essentially what you're perhaps Okay, interesting you've

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Speaker 1: mentioned before, as you say, you've come on Bloomberg many

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Speaker 1: times about everything that being able to convert to a

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Speaker 1: spot ETF would open up. There's been so much hype

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Speaker 1: and build up already, though I think prices have certainly

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Speaker 1: run very far. As Matt was just outlining, we've seen

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Speaker 1: that discount closing for GBTC compared to the underlying assets.

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Speaker 1: Is it all baked in? I mean, what happens the

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Speaker 1: next day if it finally does happen.

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Speaker 2: You know, I love this question because it's a really

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Speaker 2: important point for me to emphasize to all GBTC holders

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Speaker 2: today or who may become GBTC holders when GBTC uplists

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Speaker 2: in the New York Stock Exchange. There's nothing that investors

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Speaker 2: are going to need to do. One day GBTC will

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Speaker 2: be quoted on the OTCQX market and then on the

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Speaker 2: day that we announced it's uplisting to NYC, It'll still

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Speaker 2: be in their brokerage account, it'll carry the same GBTC ticker,

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Speaker 2: and they'll be able to trade it like they did

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Speaker 2: GBTC the day before. So in that sense it may

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Speaker 2: be uneventful. But what will be fantastic about that is

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Speaker 2: that it will allow GBTC to be within the etf

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Speaker 2: rapper have the ability to have creations and redemptions that

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Speaker 2: embedded mechanism that can happen simultaneously that keeps ETFs trading

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Speaker 2: in line with their underlying assets and would eliminate premiums

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Speaker 2: and discounts of the shares compared to the bitcoin it holds.

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Speaker 1: Okay, so we're all still waiting for this conversion to happen.

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Speaker 1: That aside, what else should we expect from Grayscale in.

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Speaker 2: The coming year, Well, I think it's been a year

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Speaker 2: for us to build. Every time we've gone through a

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Speaker 2: crypto winter at Grayscale, this is our third crypto winter.

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Speaker 2: We've used it as a time to really think about

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Speaker 2: what else should we be piloting, what else should we

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Speaker 2: be thinking about. So our team has not only finished

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Speaker 2: building out the operational infrastructure at Grayscale, our own RIA,

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Speaker 2: our own broker dealer, our own series trust, but have

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Speaker 2: also begun to pilot other types of investment vehicles. We

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Speaker 2: want to continue to innovate in terms of the exposure

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Speaker 2: beginning investors as well as the rappers for giving to investors.

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Speaker 2: So I don't want to give too much away yet,

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Speaker 2: but we are continuing to innovate and work on some

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Speaker 2: new things, all.

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Speaker 1: Right, Well, when you have news to share with us,

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Speaker 1: I hope you come back.

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Speaker 2: I will come back.

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Speaker 1: Michael Saundershein's CEO of gray Scale, Thank you so much

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Speaker 1: for joining us here