NewsletterGrayscale to reportedly convert the World’s Biggest Bitcoin Fund into spot ETF
The world’s largest crypto asset management firm, Grayscale is reportedly going to file an application to the SEC to convert the world’s biggest Bitcoin fund into spot ETF this week according to an anonymous source from the firm. CNBC’s report revealed that the ETF application will also have a 75-day review period. According to the source, Grayscale has been preparing to file its long-awaited Bitcoin spot ETF, following the footsteps of other competitors who are filing for futures-based Bitcoin ETF.
The long-term ETF strategy
Grayscale’s baby steps towards its Bitcoin ETF this year have been evident. From opening three independent crypto funds to ease the transition to an Exchange Traded Fund (ETF) to hiring the 20-year ETF veteran, Dave Lavalle as its first Global Head of ETFs, the crypto asset management giant has been determined to acquire Bitcoin ETF. Earlier this year, Grayscale CEO, Michael Sonnenshein asserted that the status of Bitcoin ETFs in the US is only the matter of “when” rather than “if.”
“A Bitcoin ETF here in the US is really a matter of when, not a matter of if…We’re looking for a couple of different points of maturation in the underlying market. That’s the final stages of what regulators need to approve those types of products.”, Sonnenshein told Squawk Box in an interview.
Spot vs. Futures backed Bitcoin ETF
As Bitcoin runs an impressive bull, staying above $62K, institutions are hopping on the Bitcoin ETF wagon. Grayscale’s Bitcoin Spot ETF application speculations are followed by SEC’s first approval of ProShares Bitcoin ETF that will track Bitcoin futures.
However, there lies a radical difference between the two. Futures-backed Bitcoin ETF will track the price of futures products and is linked to derivative contracts traded on the Chicago Mercantile Exchange instead of the actual Bitcoin. Furthermore, Grayscale’s Spot ETF will track the price of Bitcoin itself and not its derivatives. While spot ETFs are possibly more effective, yet companies are rushing to file for futures-backed Bitcoin ETF since the former lacks the SEC approval for now.
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