An interesting trend looks to be developing amongst institutional players as their interest within the flagship cryptocurrency, Bitcoin, continues to rise. This interest has in no small way been due to the frenzy across the Spot Bitcoin ETFs, which may very well be approved prior to 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 amongst fund managers and their ETFs. He noted how these asset managers are amending the prospectus of funds they manage so that they can gain exposure to Bitcoin.
These institutions are said to be seeking to use 15% to 50% of assets under their management to achieve exposure to BTC. A technique they will likely be seeking to achieve this is thru the Spot Bitcoin ETFs that might potentially launch anytime soon.
Marty Party specifically highlighted the case of Advisors Preferred Trust, which is already seeking to gain the SEC’s permission to take a position as much as 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 occur 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 best way for more corporations like MicroStrategy to incorporate BTC on their balance sheet.
The launch of Spot Bitcoin ETFs may also make it easier for these institutional investors to achieve direct exposure to the flagship cryptocurrency.
For a very long time now, those that had a previous interest within the crypto token have needed to either put money into Bitcoin futures ETFs or other Bitcoin derivatives on exchanges just like the Chicago Mercantile Exchange (CME). But that 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 cleared the path, assuming all pending Spot Bitcoin ETFs were approved concurrently. It is because the asset manager has already established itself with GBTC and would likely have more capital than other issuers upon launch.
Bloomberg Analyst Eric Balchunas highlighted this fact and hinted that the Securities and Exchange Commission (SEC) could determine to not let Grayscale launch on day one for this reason. If that doesn’t occur and all funds launch concurrently, then Grayscale is prone to have a kind of ‘first mover advantage.’
Nevertheless, other asset managers will likely be seeking to assert their dominance by adopting different strategies. One such strategy will likely be these issuers undercutting themselves by way of the fees they’ll charge to administer their respective funds. Invesco already made it known that they will likely be waiving fees for the primary six months and the primary $5 billion in assets.
Featured image from Finra, chart from Tradingview.com
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