Just In: Grayscale files for Bitcoin (BTC) covered call ETF

• Grayscale has filed for Bitcoin covered call ETF with the SEC today
• The filing comes on the day its spot Bitcoin ETF began trading with the highest trading volume amongst the 11 approved ETFs

Digital currency asset management firm – Grayscale – seems to have decided to up its game in the Bitcoin Exchange Traded Fund (ETF) sector. The company has filed for a Bitcoin (BTC) covered call ETF with the United States Securities and Exchanges Commission (SEC). The move comes hours after reports of potential filing emerged.

A covered call ETF deploys a covered call writing strategy. This means that investors can sell their call options on Bitcoin for a premium, allowing them to make additional income and hedge against potential risks. From the buyer’s point of view, a stock can be purchased at a pre-determined price before a specific timeline.

Notably, the filing stated that the fund would not directly invest in the digital asset. But “achieve 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 that utilize GBTC as the reference asset. GBTC is a grantor trust, sponsored by an affiliate of the Fund’s Adviser, with the sole purpose to hold Bitcoin (“BTC”).”

Source: SEC Filing

Spot Bitcoin ETFs draw in billions in trade volume

Notably, this comes a day after the SEC’s Chairman – Gary Gensler – admitted that the Grayscale versus SEC’s lawsuit verdict played a key role in approving a spot Bitcoin ETF. All 11 ETF applications received a green light from three SEC commissioners out of 5, including Gary Gensler – who has been vocally anti-crypto for years. Chairman Gensler had said,

“(…) the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order). The court therefore vacated the Grayscale Order and remanded the matter to the Commission (…) I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.”

These ETFs began trading earlier today and they have already amassed billions in trading volume. At press time, the trading volume of all new spot Bitcoin ETFs has reached $4 billion. Moreover, Grayscale is taking the lead in this race by taking up over 45% of the trading volume share, followed by Blackrock – the investment management giant. And, given that the traditional market is still open, the volume could gain more numbers before it closes for the day.