Leading cryptocurrency money manager Grayscale has officially confirmed its plans to file an application with the U.S. Securities and Exchange Commission to turn its Bitcoin Trust into a spot Bitcoin exchange-traded fund.
Grayscale is prepared to ask the SEC for approval
In a lengthy tweet, Jennifer Rosenthal, the company’s communications director, states that Grayscale is prepared to ask the SEC for approval as soon as a “clear” and “formal” indication is received from the regulator. This confirms rumors that circulated last week after an article of CNBC, citing people familiar with the matter.
Cryptonary reported today that Digital Currency Group CEO Barry Silbert also started teasing the conversion prior to the official announcement and urged his followers to stay tuned. Jennifer Rosenthal’s tweets confirm that he was not just hinting at it but that there indeed are plans to do this.
What is a Bitcoin Spot ETF?
ProShares announced today that its Bitcoin futures ETF will begin trading on the New York Stock Exchange on Tuesday, but Grayscale is not aiming for a futures-backed ETF. The company is more interested in a spot Bitcoin exchange-traded fund because with a spot ETF, the bitcoin ETF is backed by real Bitcoin, while derivatives of bitcoin back bitcoin futures ETFs. That means that similar to a futures ETF. The Bitcoin ETF will track the digital currency’s price.
Most analysts favor a spot ETF because the price of a futures-based bitcoin ETF could trade at a premium during a bull market and at a discount during a bear market. Some Bitcoin proponents argue that investors can get better returns by buying the cryptocurrency outright. However, it is impossible to predict the future performance of an asset.