Grayscale applies for Bitcoin covered call ETF

Grayscale applied for a Bitcoin covered call ETF on Jan. 11, as seen in a filing from the company and in various external reports.

In a statement to Reuters , Grayscale CEO Michael Sonnenshein said:

“This should be received as a declaration of not only not just having gotten GBTC to market as a spot bitcoin ETF, but our commitment to the product’s growth and the ecosystem around the product itself.”

Grayscale’s N-1A filing with the U.S. Securities and Exchange Commission (SEC) states that the new fund is intended to deliver current income and participation in the price return of GBTC. GBTC is an existing Bitcoin investment fund from Grayscale that was finally converted to an exchange-traded fund on Jan. 10 .

Covered call ETFs provide shares of a fund that relies on a covered call investment strategy. Grayscale’s latest proposal could seemingly offer new benefits to investors: Investopedia notes that covered call ETFs can provide investors both steady income with risk protection while eliminating any need to spend time and money creating one’s own covered call strategy.

The N1-A filing means that Grayscale has filed a registration statement for the fund. However, the filing also notes that its contents are not complete.

Grayscale played key role in ETF approvals

Grayscale is just one of eleven spot Bitcoin ETF applicants that gained approval from the U.S. Securities and Exchange Commission (SEC) on Jan. 10.

The securities agency acknowledged that a legal challenge in which Grayscale compelled it to review its application led to the latest batch of fund approvals.

SEC chair Gary Gensler explained that the court found that the SEC had failed to “adequately explain its reasoning” for disapproving Grayscale’s application. Specifically, the SEC failed to explain why it approved Bitcoin futures ETFs while rejecting spot Bitcoin ETFs due to a risk of market manipulation. However, Gensler did not acknowledge this precise point himself.

Gensler ultimately called approval of the relevant exchange-traded products the “most sustainable path forward” in light of Grayscale’s case and its outcome.