While institutional investments into the Bitcoin market have been pouring in like crazy this past year, several barriers to entry remain. Along with regulatory uncertainty, the complexity of its technology and accumulation processes continue to remain a deterrent for many.
It is no wonder then that a Bitcoin ETF has been very long-awaited by many of the industry’s proponents. It would be especially attractive to those who wish to become a part of it through more traditional avenues. To fill this void, Grayscale has stepped in with its Bitcoin Trust (GBTC) which offers exposure to the digital asset.
However, the firm too has long been pushing to convert the fund into an ETF.
“All investors to participate”
In a recent interview with Yahoo Finance, Grayscale Global Head of ETFs Dave LaValle highlighted exactly why an ETF is more exciting for investors than a trust. It lies in the nature of the broader ETF market, according to the exec, as it offers the opportunity for an equitable investment opportunity for the broadest range of investors.
According to the exec, the firm’s current investor base is very “narrow.” The conversion to an exchange-traded fund would allow “all investors to participate in the investment,” he added.
What is behind the increasing demand for an ETF though? According to Outlier Ventures Partner Rumi Morales,
“It’d be a way for many investors to be able to access and take part of the economic opportunity of Bitcoin without having to deal with technical issues right now, like registration of wallets or storage of coins. It can make investing in Bitcoin a lot easier for more traditional investors.”
“To each his own”
Digital asset investment products are generally preferred by institutional investors as a means to gain crypto-exposure. In fact, almost 90% of investors in a Fidelity survey reportedly expressed a desire for the same. Moreover, single-asset investment products that contain Bitcoin-only are well sought after by almost half of the investors.
What’s more, 62% of U.S. investors surveyed expressed a neutral-to-positive view about a potential Bitcoin ETF. Investors “expect the digital assets industry to more closely mirror that of other asset classes,” it found.
However, the only way for investors in the U.S to gain this exposure would be once the Securities and Exchange Commission approves a BTC ETF to list on Wall Street.
“….[It will] allow the opportunity for investors to you know choose their own exposure that meets their own investment needs and their own investment thesis.”