Moderator Eric Balchunas kicked off a panel on spot bitcoin ETFs by asking for a round of applause for panelist David LaValle, global head of ETFs at Grayscale Investments.
"You fought the law and won," said Balchunas, senior ETF analyst at Bloomberg Intelligence, in addressing LaValle during a Feb. 13 session called "The Gloves Are Off: The Bitcoin ETF Showdown," held as part of the Exchange ETF conference in Miami Beach.
"You beat Gensler," the ETF analyst said. "Not many people can say that."
Balchunas was referring to Gary Gensler, chair of the Securities and Exchange Commission. In August 2023, a federal appeals court ruled in favor of Grayscale in its closely watched case against the SEC over the regulator's denial of an application to convert the Grayscale Bitcoin Trust, known by the symbol GBTC, to a spot bitcoin ETF.
"Now for the tough question: What's with the fee?" Balchunas asked LaValle, a reference to the 1.5% fee charged for GBTC, which is substantially higher than fees on rival products. The SEC approved 11 spot bitcoin ETF proposals on Jan. 10. Ten of them, including GBTC, began trading on Jan. 11.
"It's a fair question," LaValle replied, adding that it's one Grayscale has been asked a lot.
"This is about investor choice, and this is about differentiation," he said. "We came to market in a very unique position, we have a 10-year track record, we have been operating as a crypto asset manager with (the) largest spot bitcoin fund in the world, and it's about optionality for clients, it's about choice for clients."
Fee is one aspect of a decision that clients have the ability to make, LaValle said.
"And if fee is most important to them, then that's their choice," he said, adding, however, that there are other considerations such as liquidity and track record.
