Bitcoin Breaks Through Securities Barrier: Registered Funds Want Exposure To BTC
January 03 2024 - 5:30AM
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An interesting trend looks to be developing among institutional
players as their interest in the flagship cryptocurrency, Bitcoin,
continues to rise. This interest has in no small way been thanks to
the frenzy around the Spot Bitcoin ETFs, which could be approved
sooner than later. Other ETFs Considering Bitcoin As An Investment
Option Crypto commentator and music producer Marty
Party recently drew the crypto community’s attention to an emerging
trend among fund managers and their ETFs. He noted how these asset
managers are amending the prospectus of funds they manage so they
can gain exposure to Bitcoin. Related Reading: Dogecoin Is
Bullish? Crypto Analyst Gives Reasons Why Investors Should Pay
Attention These institutions are said to be looking to use 15% to
50% of assets under their management to gain exposure to BTC. One
way they will be looking to achieve this is through the Spot
Bitcoin ETFs that could potentially launch anytime soon.
Marty Party specifically highlighted the case of Advisors Preferred
Trust, which is already looking to gain the SEC’s permission to
invest up to 15% of its AuM in Bitcoin-related ETFs like
Grayscale’s Bitcoin Trust (GBTC) and ProShares Bitcoin Strategy
ETF. MicroStrategy’s Executive Chairman and Co-founder,
Michael Saylor, had previously hinted that something like this was
going to happen soon enough. Then, he suggested that more
institutional players were going to direct more of their capital to
Bitcoin. A rule that was implemented by the Financial
Accounting Standards Board (FASB) has also paved the way for more
companies like MicroStrategy to include BTC on their balance
sheet. The launch of Spot Bitcoin ETFs will also make it
easier for these institutional investors to gain direct exposure to
the flagship cryptocurrency. For a long time now, those who
had a prior interest in the crypto token have had to either invest
in Bitcoin futures ETFs or other Bitcoin derivatives on exchanges
like the Chicago Mercantile Exchange (CME). But this is changing
with the potential approval of a Spot Bitcoin ETF. BTC price holds
$45,000 | Source: BTCUSD on Tradingview.com Grayscale Leading In
The “Cointucky Derby” As highlighted recently by Bloomberg Analyst
James Seyffart, Grayscale looks to set the lead the way, assuming
all pending Spot Bitcoin ETFs were approved simultaneously. This is
because the asset manager has already established itself with GBTC
and would likely have more capital than other issuers upon
launch. Related Reading: Is A Bitcoin Spot ETF Approval A
Sell The News Event? Experts Respond Bloomberg Analyst Eric
Balchunas highlighted this fact and hinted that the Securities and
Exchange Commission (SEC) could decide not to let Grayscale launch
on day one because of this. If that doesn’t happen and all funds
launch simultaneously, then Grayscale is likely to have a sort of
‘first mover advantage.’ However, other asset managers will be
looking to assert their dominance by adopting different strategies.
One such strategy will be these issuers undercutting themselves in
terms of the fees they will charge to manage their respective
funds. Invesco already made it known that they will be waiving fees
for the first six months and the first $5 billion in assets.
Featured image from Finra, chart from Tradingview.com
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