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Speaker 1: Joining us now, I'm pleased to say, is Michael sonnenschein

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Speaker 1: See a CEO of Grayscale, not just one of the

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Speaker 1: eleven issuers of one of these spot products. He actually

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Speaker 1: had GBTC converted into this, but really arguably what started

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Speaker 1: this all. So Michael, thank you very much for joining us.

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Speaker 1: If you just look at the language and Gary Gonsler's

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Speaker 1: statement about the approval, he specifically points to the gray

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Speaker 1: Scale case and says that changed the circumstances why he

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Speaker 1: felt it was the most sustainable path forward to approve

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Speaker 1: the listing and trading of these ETPs. How does it feel?

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Speaker 2: Well, it is definitely a historic day. I mean, joining

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Speaker 2: you guys live from the floor of the New York

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Speaker 2: Stock Exchange. You know, this is the culmination of ten

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Speaker 2: years of work. It's a huge thank you at this

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Speaker 2: moment to our investors for being patient supporting us. A

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Speaker 2: huge thank you to the Grayscale team looking back on

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Speaker 2: the last couple of years, making the decision to sue

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Speaker 2: our regulator, to have that unan victory in court, and

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Speaker 2: then all of that come to fruition and actually have

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Speaker 2: GBTC uplist on New York Stock Exchange as the world's

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Speaker 2: second largest commodity ETF is just such a historic moment

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Speaker 2: and such a milestone. So thrilled, feeling really good today.

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Speaker 3: Second largest commodity ETF and the largest crypto fund already

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Speaker 3: in the world for bitcoin. How do you go around, then, Michael,

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Speaker 3: attracting new assets to this ETF form. What are your

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Speaker 3: conversations with clients look like today?

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Speaker 2: Well, I think what's really exciting about this this day

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Speaker 2: really is that you're now going to have eleven different

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Speaker 2: spot bitcoin ETFs on the market, and you know, GBTC

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Speaker 2: has really paved the way for a lot of those

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Speaker 2: other products to come to market. GBTC will be differentiated

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Speaker 2: though right it came to market with twenty eight billion

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Speaker 2: dollars of assets, tremendous, tremendous liquidity. We're seeing that play

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Speaker 2: out even further today on the New York Stock Exchange.

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Speaker 2: But it won't necessarily be everything to all investors, and

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Speaker 2: so some investors may look for these products that are

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Speaker 2: super super low cost, and that's what's most important to them.

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Speaker 2: To other investors, the fact that GBTC has a tenure

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Speaker 2: track record, billions of dollars of aum, that liquidity profile

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Speaker 2: brought to you by a crypto specialist. That'll be some

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Speaker 2: of the differentiators that attract them as well. But it's

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Speaker 2: a little too early to see how it's all going

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Speaker 2: to play out, Michael.

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Speaker 3: When we look at the bitcoin price action today, we

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Speaker 3: jumped up to forty nine thousand, and we're back down

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Speaker 3: barely above forty six thousand now coming into today, a

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Speaker 3: lot of investors were concerned about potential selling pressure out

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Speaker 3: of GBTC. What are you experiencing in.

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Speaker 2: Terms of close Yeah, well, last time I checked, GBTC

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Speaker 2: was one of the only ETFs that was positive on

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Speaker 2: the day, right, and so we had a really successful

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Speaker 2: and smooth uplisting to nyc ARCA. Last I checked, the

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Speaker 2: notional trading volume had already eclipsed well above a billion

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Speaker 2: and a half dollars notionally today, So the volumes have

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Speaker 2: been really, really strong.

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Speaker 1: Well, obviously that's for gp TCTC, which has taken up

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Speaker 1: so much attention for this very reason about your attempts

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Speaker 1: to convert it to the spot bitcoin ETF what it

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Speaker 1: would mean for everyone else. But to go back to

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Speaker 1: what we were just hearing from Commissioner Purse, this approval

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Speaker 1: was very narrow, very specific to these bitcoin products Greyscale.

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Speaker 1: There's plenty of other products out there. You've got an

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Speaker 1: ether Trust, light Cooin Salana as well. I believe are

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Speaker 1: you going to pick a fight with the SEC about

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Speaker 1: any of those try to make any of those spot

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Speaker 1: ETF's Michael Well.

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Speaker 2: I think you guys know our business model pretty well,

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Speaker 2: and we're pretty transparent about it. We do have a

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Speaker 2: family of seventeen different digital asset products that are each

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Speaker 2: at one stage of a very prescribed four phase life cycle.

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Speaker 2: GBTC is the first of those products to get to

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Speaker 2: stage four to uplist as a spot daitcoin ETF. Last year,

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Speaker 2: we already filed to uplist our ethereum product, the Greyscale

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Speaker 2: etherium Trust, to a spot Ethereum ETF, and we really

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Speaker 2: believe that GBTC can really pave the way for the

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Speaker 2: rest of that product family to continue along that four

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Speaker 2: phase life cycle, and ultimately you'll see from the Greyscale

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Speaker 2: family an entire suite of digital asset or crypto focused ETFs.

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Speaker 3: Wait, so if you want to see an ethereum ETF,

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Speaker 3: for example, how soon do you think something like that

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Speaker 3: could happen to Kayley's point. The SEC was also very

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Speaker 3: clear that this is just an approval for Bitcoin related

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Speaker 3: ETPs and did not. In fact, they were kind of

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Speaker 3: critical about the crypto industry and their statement.

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Speaker 2: Well, you know, I do think one of the things

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Speaker 2: that we have to look at and how we got

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Speaker 2: to this historic outcome was the fact that the SEC

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Speaker 2: was treating the bitcoin futures based products differently than the

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Speaker 2: bitcoin spot based products like GBTC. You know, the fact

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Speaker 2: that you know, we now have that you know, similar

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Speaker 2: situation with ethereum futures based ETFs, but not ethereum Spot.

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Speaker 2: May pretend that we may have similar arguments that surround

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Speaker 2: the eventual uplisting or approval of Spot ethereum products in

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Speaker 2: the market. We do have a market of significant size

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Speaker 2: on the CME for ethereum, and I think that's a

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Speaker 2: really important point and another really important validation for how

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Speaker 2: crypt as an asset class is here to stay.

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Speaker 3: Now. I'm curious about the fee structure, Michael. You know,

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Speaker 3: I ask you about this every time. It has been

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Speaker 3: the biggest question in talent when it comes to Grayscale

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Speaker 3: and GBTC. Was the calculus that you'd rather keep the

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Speaker 3: fee at one point five percent and even face potential

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Speaker 3: outflows because of it with others competing on fees rather

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Speaker 3: than try to compete in the rate to zero for

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Speaker 3: eats here.

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Speaker 2: Well, I think for us, first of all, like I've

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Speaker 2: always told you, Sonali, it's always going to be that

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Speaker 2: we were going to reduce fees, and we made good

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Speaker 2: on that commitment. We reduced fees by twenty five percent.

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Speaker 2: Other issuers coming into the market with no assets, no

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Speaker 2: trading volumes, no base of investors, we're really starting coming

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Speaker 2: out of the gate offering incentives to get investors into

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Speaker 2: their funds. I do think GBTC, like we've seen in

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Speaker 2: other ETF categories, is really that specialist that first to

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Speaker 2: market with the AUM, with the trading volume, with the

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Speaker 2: track record, that does command a higher fee. And I

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Speaker 2: think we're now seeing that now for spot bitcoin products

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Speaker 2: way we've seen it in other parts of the ETF ecosystem,

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Speaker 2: and I think this is a really important differentiation.

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Speaker 3: You talked about flow volumes earlier. Flows can mean inflows

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Speaker 3: or outflows. What are you seeing in terms of directions

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Speaker 3: either way netflows at this point in time.

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Speaker 2: I think it's too early to say, since GBTC has

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Speaker 2: been trading since twenty fifteen. We've had investors come into

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Speaker 2: our fund and out of our fund every single day,

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Speaker 2: hundreds of thousands of investors across all fifty states. I

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Speaker 2: think this same will be true with GBTC now as

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Speaker 2: an ETF.

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Speaker 1: And finally, Michael, obviously this concludes what had been a

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Speaker 1: long litigation mess that Grayscale, if you will, had to

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Speaker 1: be involved in with the SEC. But there is other

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Speaker 1: litigation I want to ask you about, because obviously Alameda

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Speaker 1: has involved gray Scale and a four billion dollar suit

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Speaker 1: essentially seeking four billion dollars in value for gray Scale shareholders.

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Speaker 1: Now that these spot ETF products are approved, how does

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Speaker 1: that change that legal issue for you?

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Speaker 2: Sure? Yeah, I mean it's tough to, you know, comment

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Speaker 2: on ongoing litigation, but what I will say is that

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Speaker 2: we have fulfilled the promise that we made to investors,

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Speaker 2: which was getting GBTC uplisted as a spot at clin ETF,

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Speaker 2: and that all came true this very morning.

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Speaker 3: Michael, What's next? What does the next couple of days

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Speaker 3: look like to you? Are you all around looking for

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Speaker 3: new assets here? Are you planning on cutting your fees

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Speaker 3: once more?

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Speaker 2: Well, I'll tell you the last few days have almost

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Speaker 2: really been a blur, having a lot of conversations with

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Speaker 2: folks like yourselves, speaking a lot with our investors. We're

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Speaker 2: hearing an outpouring of support from the investment community, really

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Speaker 2: thanking the Grayscale team for forging ahead, for doing the

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Speaker 2: tough work to go up against the regulator, knowing that

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Speaker 2: we had sound arguments, and that really has paved the

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Speaker 2: way for the outcome that we've now achieved here today.

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Speaker 3: Grace Bales, Michael Sun and Channi, thank you so much

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Speaker 3: for your time on this historic day. I know a

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Speaker 3: lot of the crypto industry is pointing to you for

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Speaker 3: the reason that the this is all happening today. So

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Speaker 3: we'd like to have you back on the next set

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Speaker 3: of ETFs.