On Wednesday, news broke that Grayscale Investments had hired David LaValle, former CEO of Alerian, to head up its new ETF division. As managing director and global head of ETFs, LaValle will lead efforts to convert the crypto asset management firm’s flagship products to ETF form.
Tom Lydon sat down with LaValle to learn more about his new position, Grayscale’s ETF ambitions, and what the future has in store for crypto investing.
Tom Lydon, CEO, ETF Trends: Dave, as a seasoned ETF veteran, why are you making the move to Grayscale?
David LaValle, Managing Director and Global Head of ETFs, Grayscale Investments: Grayscale is the world’s largest crypto asset manager with a goal of developing a world-class ETF business. Having the opportunity to leverage my diverse ETF industry experience and the Grayscale brand to advance and build this business feels like a once-in-a-career opportunity and challenge that I couldn’t pass up.
Lydon: What’s your anticipated timeline for a Bitcoin ETF?
LaValle: What’s exciting about this question, Tom, is that this is now really a question of when, and not if, a Bitcoin ETF will come to market.
We continue to see maturation of this relatively new, decade-old asset class, and there are many signs around the industry signaling positive momentum. But, like the rest of the industry, we do not know the timeline for regulatory approval.
Lydon: Grayscale already has some successful crypto-related products, such as the Grayscale Bitcoin Trust (GBTC). Why is an ETF necessary?
LaValle: I view a Bitcoin ETF as the next chapter in the ETF product’s evolution and growth; it is exciting and something we have seen time and time again over the past 20+ years. Since its inception, the ETF product has proven to be an investment vehicle that democratizes investing, offering the investment community equal access to investments that have previously only been available to institutions or accredited investors.
Grayscale is committed to converting our largest product, Grayscale Bitcoin Trust (GBTC), into an ETF, allowing the broadest range of investors access and exposure to Bitcoin.
Lydon: What investor trends or demand have you seen recently that give you confidence in this commitment to ETFs?
LaValle: Today’s investors are looking for transparency, fair access, and the ability to customize their exposure to meet their individual goals. ETFs have proven to be a cost-effective, battle-tested vehicle that investors of all shapes and sizes are using as building blocks to construct thoughtful portfolios. I believe the future of ETFs is quite bright, and I look forward to working with the Grayscale team to fuel the next wave of the industry’s evolution.
I view ETFs as a disruptive financial technology. I am confident that we are still in the early innings of the ETF lifecycle. I equate where we are today with the arrival of smartphones, [specifically]when consumers were excited to have a phone and music on one device. At that time, there was no concept of GPS-enabled technologies, nor other transformative use cases like Lyft or Waze, which have since been developed. Similarly, with ETFs, we have not yet explored all the possible use cases for the investment wrapper, nor has the product been broadly adopted by all investors.
The relatively recent adoption of fixed income ETFs by global banks as liquidity tools, and by the U.S. government buying ETFs to support the market during the early onset of the COVID-19 pandemic, are two strong examples that signal the products’ continued expansion.
Lydon: Should a Bitcoin ETF be seen as the endgame for Grayscale’s products, or just another step on a longer journey?
LaValle: At Grayscale, we are committed to becoming a world-class, next-generation ETF issuer. A Bitcoin ETF is only the beginning. We have a long-term vision for Grayscale’s business that includes a mix of single asset products, diversified products, and more. Our goal is to create more avenues for investors to get direct access to the next generation of investments: digital currencies and the crypto ecosystem, more broadly.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.