Matt Levine’s Money Stuff: Grayscale Can Be a Bitcoin ETF

Grayscale

There are two ways to run a Bitcoin exchange-traded fund:

1. You could raise money from investors, park it in cash or Treasuries, and trade cash-settled Bitcoin futures listed on a US commodities exchange. The futures would periodically expire, paying off whatever Bitcoin is worth at the time, and you would roll the proceeds into new futures to keep your Bitcoin bet active. The ETF would roughly track the price of Bitcoin, because the futures pay off based on the price of Bitcoin, but there would be some frictional costs from rolling the futures and some tracking error.

• 2. You ...