In recent weeks, the first American bitcoin futures ETFs have been launched on the stock exchange, which also brings the arrival of a spot ETF closer. The great Grayscale has started the process of converting their Grayscale Bitcoin Trust (GBTC) into a spot ETF. The fund, which houses about 40 billion dollars (34 million euros) in bitcoin, would instantly become one of the largest ETFs in the world.
An important step for bitcoin that would give many large funds the concrete opportunity to invest in physical bitcoin for the first time. After filing the application, the U.S. Securities and Exchange Commission (SEC) has 45 days to respond. Which means we may already get the first US bitcoin spot ETF on the market on December 24th.
Grayscale is not the only party on the market
The great Grayscale isn’t the only party in the market trying to launch a spot bitcoin ETF. Since 2013, parties have been trying to get a spot bitcoin ETF on the market. To date, this has not yet been successful, but the applications are now piling up at the SEC. It therefore seems only a matter of time before the first party receives approval to list their investment product on the stock exchange.
With a spot bitcoin ETF, investors simply have access to a product that follows the bitcoin price almost seamlessly. Proponents of a spot bitcoin ETF say that in many cases it is still too complex to buy bitcoin on exchanges, to keep it in wallets and that private keys are still a scary concept for some people.
A bitcoin ETF would make it a lot easier for this segment of the interested public to invest in bitcoin. Which means a whole wall of new money could flow into bitcoin if the first spot ETF hits the market. However, it remains to be seen to what extent a US ETF makes the difference, as Canadian and Brazilian spot ETFs are currently available, among others.
Grayscale already manages 650,000 bitcoins
In addition, with GBTC, there is already a fund on the US market that has more than 650 thousand bitcoin on the shelf. It remains to be seen to what extent the conversion to a spot ETF will generate additional interest in the fund. In terms of characteristics, GBTC is in many ways comparable to a spot ETF. The main difference seems to be in the fund’s management costs.
The conversion to a spot bitcoin ETF would make it cheaper for Grayscale to manage the fund and easier for money to flow in and out of the fund. Grayscale first attempted to launch a spot bitcoin ETF in 2016 and now, five years later, appears to have a serious chance of doing so for the first time.
The market is maturing and the traditional financial world is slowly starting to embrace bitcoin. That is good to see, because for many investors this takes away the fear that bitcoin will one day be banned. That is a scenario that already seems practically impossible after the arrival of the first American bitcoin futures ETFs. After the launch of spot bitcoin ETFs, those doubts can be completely dispelled.
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