- Grayscale today filed for a Bitcoin Covered Call ETF with the SEC
- The filing comes on the day Bitcoin ETF began trading on the spot with the highest trading volume of the 11 approved ETFs
Digital currency management company – Grayscale – appears to have decided to up its game in the Bitcoin Exchange Traded Fund (ETF) sector. The company has filed for a Bitcoin (BTC) backed call ETF with the US Securities and Exchanges Commission (SEC). The move comes hours later reports of possible submission emerged.
A covered call ETF uses a covered call writing strategy. This means that investors can sell their call options on Bitcoin at a premium, generating additional income and hedging against potential risks. From the buyer’s point of view, a stock can be purchased at a predetermined price before a certain timeline.
The filing specifically stated that the fund would not invest directly in the digital asset. But “achieving its investment objective primarily through actively managed exposure to Grayscale Bitcoin Trust (BTC) (“GBTC”)”. It read,
“The Fund seeks to achieve its investment objective primarily through actively managed exposure to Grayscale Bitcoin Trust (BTC) (“GBTC”) and the purchase and sale of a combination of call and put option contracts using GBTC as the reference asset. GBTC is a trust provider, sponsored by an affiliate of the Fund’s advisor, for the sole purpose of holding Bitcoin (“BTC”).”
Source: SEC filing
Spot Bitcoin ETFs are pulling in billions in trading volume
Notably, this comes a day after the Chairman of the SEC – Gary Gensler – admitted that the ruling in the Grayscale vs. SEC lawsuit played a key role in the approval of a spot Bitcoin ETF. All eleven ETF applications were given the green light by three of the five SEC commissioners, including Gary Gensler – who has been outspokenly anti-crypto for years. Chairman Gensler had said:
“(…) the Commission has failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order). The court therefore lifted the Grayscale Order and referred the case back to the Commission (…). I believe the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.
These ETFs started trading earlier today and have already amassed billions in trading volume. At the time of writing, trading volume of all new spot Bitcoin ETFs has reached $4 billion. Moreover, Grayscale is taking the lead in this race by capturing over 45% of the trading volume, followed by Blackrock – the investment management giant. And since the traditional market is still open, volume could increase even more before it closes for the day.