A Bitcoin Spot ETF Could Come Sooner Than You Think
We could have the first spot Bitcoin ETF on the market near the end of this year, as Grayscale intends to file for SEC approval for its product by “early next week,” according to CNBC. Grayscale's intention is to convert their Bitcoin Fund ($GBTC) into a spot Bitcoin ETF.
The official Grayscale filing will kick off a 75-day review period for the SEC to either approve or deny the proposed spot Bitcoin ETF, a first of its kind, physically-settled, bitcoin financial product.
BITCOIN FUTURES ETF OPENS THE DOOR
After the approval for a Bitcoin futures ETF by companies ProShares and Valkyrie, the action appears to have opened the door for an immediate path to a physically-settled Bitcoin ETF coming to market.
Founder and CEO of Digital Currency Group, Barry Silbert, had Grayscale's application for a spot ETF waiting in his back pocket for the SEC to allow Grayscale competitors to enter the market.
“The investment firm had intended to file its application to the Securities and Exchange Commission as soon as the agency allowed efforts by competitors for a futures-based bitcoin ETF, said the person. That happened late Friday,” CNBC reported.
The approval of bitcoin ETF products enables a more competitive landscape, and also unlocks new pools of capital from different pockets of traditional financial institutions that were previously facing too many hurdles to get exposure to Bitcoin.
HOW IS A BITCOIN SPOT ETF DIFFERENT?
A spot ETF product tracks the Bitcoin price closer than a futures ETF. The spot price of Bitcoin is the current USD cost for immediate purchase and delivery. Being physically-settled, with instant delivery, a spot product would be able to more-closely track the price of Bitcoin and reduce uncertainty that comes with an ETF tracking a projected future price.
“A bitcoin “spot” ETF would be better for investors, both from a price tracking and fee structure standpoint.”— Anthony Pompliano, Morgan Creek Digital Assets
If approved, the timing for Grayscale’s Spot ETF comes at an intriguing moment in the market. Bitcoin continues to push over $60,000 USD and is eyeing previous all time high prices. All while fresh off a bitcoin mining ban in China, and as U.S. politicians continue to signal support for the nascent digital asset.