Bitcoin ETF is no longer an if but a when, according to Grayscale Investments


All hope is not lost for supporters of the bitcoin ETF, according to Grayscale Investments.

Securities and Exchange Commission Chairman Gary Gensler dampened enthusiasm over the approval of a bitcoin-based exchange-traded fund last week, saying digital currencies needed a lot more regulation before to enter the world of ETFs.

But for the company behind the ever-popular Grayscale Bitcoin Trust (GBTC), Gensler’s comments came as a statement, Grayscale’s global ETF manager David LaValle told CNBC’s “ETF Edge” on Monday.

“We read that Chairman Gensler’s comments were very positive… because the story is no longer if there will be a bitcoin ETF but when there will be a bitcoin ETF,” said LaValle.

Grayscale plans to convert GBTC to ETF when the SEC warms to the idea – but LaValle has acknowledged that this will require regulatory oversight, as with any other asset class that eventually evolved into ETFs.

“When the SEC is convinced that there is enough transparency, enough maturity, in the underlying market, we will see an ETF,” he said.

The recent approval of a Bitcoin futures-based mutual fund from ProShares is a step in the right direction, ProShares chief investment officer Simeon Hyman said in the same interview.

The Bitcoin Strategy ProFund (BTCFX) has been up nearly 14% since its launch in July and is primarily invested in first-month bitcoin futures, which tend to be highly correlated with the bitcoin spot price.

“The advantage of this approach is clear. The futures market is regulated. So you have the CME [Chicago Mercantile Exchange], the CFTC [Commodity Futures Trading Commission], you’ve got the clearinghouse, and then you’re in a mutual fund that people understand well and you can go in and out every day at NAV [net asset value]”Hyman said, calling the fund a” really important entry point “for investors.

If the SEC decides to first approve a bitcoin ETF based on futures contracts, then ProShares would likely be in the right position. But in any case, the market for bitcoin-based products is only in its “first few legs,” Hyman said.

“There will be a myriad of ways for people to be exposed over time,” he said. “When these opportunities arise, we will explore them very carefully. “

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