With the inclusion of a bitcoin futures ETF in the New York Stock Exchange, Grayscale Investments is hoping to build off that success with a fund that offers exposure to the leading cryptocurrency’s spot price.
Ultimately, this means turning its current most popular product, the Grayscale Bitcoin Trust (GBTC), into an ETF. The company has re-iterated its commitment to morph the trust into an ETF following its filing with the Securities and Exchange Commission (SEC).
This comes at an opportune time, given the release of a U.S. bitcoin futures ETF into the capital markets. Following this, a number of fund providers released products that also cater to bitcoin, giving investors access to the digital currency space.
Bitcoin’s price reached an all-time high in a bullish October, dubbed “Uptober” by crypto pundits. As such, GBTC has been the beneficiary of a strong run-up, posting year-to-date gains of over 50%.
A spot price bitcoin ETF would open up the market to traditional finance investors who are still hesitant to invest directly into the crypto market. Much like ETFs that track the spot price of commodities, an ETF wrapper could help limit the price volatility of the underlying asset.
“Now that the Bitcoin futures products were somewhat off the plate of the SEC, they would be open to look at the filings of spot-based products,” said Grayscale global head of ETFs David LaValle in a Cointelegraph article.
A Blockchain Bet Worth Placing
One way to get indirect access to the Grayscale Bitcoin Trust is via ETFs that hold the fund, such as the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). Per its fund description, BLKC will aim to track the Alerian Galaxy Global Blockchain Equity, Trusts & ETPs Index.
The index is comprised of stocks of companies that are materially engaged in the development of blockchain technology, cryptocurrency mining, cryptocurrency buying, or enabling technologies, exchange traded products (ETPs), and private investment trusts traded over-the-counter that are linked to cryptocurrencies. The fund comes with a 0.60% expense ratio.
Looking under the hood, 15% of its allocation goes to the Grayscale Bitcoin Trust, giving investors indirect exposure to the leading cryptocurrency, bitcoin. This indirect exposure can be of benefit when it comes to investors who are still hesitant to invest directly in digital currencies.
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