Grayscale Investments LLC today announced the official appointment of David LaValle as its global head of exchange-traded funds(ETFs).
David is the former chief executive officer of custom index provider Alerian. He will drive the effort to convert the $25 billion Grayscale Bitcoin Trust into an ETF. The company is “100% committed” to carry out this process, CEO Michael Sonnenshein.
Grayscale has been ramping up its ETF arm even as the U.S. SEC faltering on allowing cryptocurrencies into the structure. In addition to LaValle’s hire, the firm is seeking to fill at least 10 other ETF-related roles.
Grayscale also announced last month that it would partner with Bank of New York Mellon for ETF services following GBTC’s conversion. The efforts reflect the firm’s ambition to become a leading ETF issuer, according to LaValle.
If converted, GBTC would immediately become the third-largest commodity ETF. Only the $60 billion SPDR Gold Shares (GLD) and $29 billion iShares Gold Trust (IAU) command more assets, according to data.
Converting GBTC into an ETF would also likely solve Grayscale’s persistent problem of the trust’s discount. The product’s price has traded below its underlying Bitcoin holdings since March. The discount is currently around 10%, after reaching 21% in May.
Fanning the situation is the fact the trust’s outstanding shares can’t be destroyed. As Bitcoin soared to a record, These shares have ballooned by hundreds of millions over the past 12 months.
Converting to an ETF would mean that users can redeem their shares, allowing specialized traders known as authorized participants to arbitrage away the discount. “A conversion to an ETF would very likely collapse that discount,” LaValle said.
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