- Grayscale today filed with the SEC for a Bitcoin covered call ETF.
- The report comes on a day when the spot Bitcoin ETF began trading with the highest volume among the 11 approved ETFs.
Digital currency asset management company Grayscale appears to have decided to step up its game in the Bitcoin exchange-traded fund (ETF) sector. The company has applied for a Bitcoin (BTC) covered call ETF with the U.S. Securities and Exchange Commission (SEC). The move came hours after reports emerged of a potential filing.
Covered call ETFs deploy a covered call writing strategy. This means that investors can sell call options on Bitcoin at a premium to generate additional profits and hedge against potential risk. As a buyer, you can purchase stocks at a predetermined price before a certain point in time.
Specifically, the filing states that the fund will not invest directly in digital assets. However, it achieves its investment objectives primarily through “actively managed exposure to the Grayscale Bitcoin Trust (BTC) (“GBTC”). It read,
“The Fund achieves its investment objective primarily through actively managed exposure to the Grayscale Bitcoin Trust (BTC) (“GBTC”) and the purchase and sale of a combination of call and put option contracts utilizing GBTC as the reference asset. I’m going to do it. GBTC is a transfer trust sponsored by affiliates of the Fund Advisor for the sole purpose of holding Bitcoin (“BTC”).”
Source: SEC filing
Spot Bitcoin ETFs record billions of dollars in trading volume.
Notably, this comes a day after SEC Chairman Gary Gensler acknowledged that the SEC’s lawsuit ruling against Grayscale played a key role in approving a spot Bitcoin ETF. All 11 ETF applications received approval from three out of five SEC commissioners, including Gary Gensler, who has spoken out against cryptocurrencies for years. Chairman Gensler said:
“(…) The Commission failed to adequately explain why it did not approve the listing and trading of the Grayscale Order (ETP) proposed by Grayscale. Accordingly, the court vacated the grayscale order and remanded the matter to the Commission. (…) I believe the most sustainable way is to authorize the listing and trading of these spot Bitcoin ETP shares.”
These ETFs began trading today and have already amassed billions of dollars in trading volume. As of press time, trading volume for all new spot Bitcoin ETFs has reached $4 billion. Moreover, Grayscale leads the way with more than 45% of the trading volume share, followed by investment management giant BlackRock. And considering that traditional markets are still open, trading volume may be higher before closing for the day.