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Meet Europe’s Cheapest Spot Bitcoin ETF With Bear-Market Resistance

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21shares has launched Europe’s new low-cost spot Bitcoin ETF in Switzerland that claims to withstand the bear market.

Announcing its Crypto Winter Suite, the world’s largest issuer of cryptocurrency exchange-traded products [ETPs] rolled out the first product in the suite dubbed as 21Shares Bitcoin Core ETP [CBTC], on the SIX Swiss Exchange.

According to the press release, CBTC has a total expense ratio of 21 basis points [0.21%] signifying the 21 million cap on Bitcoin – which is 44 basis points [0.44%] below the next lowest product on the market.

In order to achieve this, a portion of the underlying crypto would be lent out on a fully collateralized basis to balance out the operating costs. Lending on CBTC will commence once the product achieves sufficient scale, the blog read.

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Meet Europe's Cheapest Spot Bitcoin ETF With Bear-Market Resistance 2

Beyond that, the ETP curator’s next focus would be creating bear-market compatible products. Arthur Krause, Director of ETP Product at 21Shares stated,

Given the current market environment, many investors are looking to ‘buy-the-dip’ and generate the maximum potential long-term return.Our Crypto Winter Suite will provide ways for investors to dip their toes in the water at some of the lowest costs on the market.

Last week, ProShares debuted its first short bitcoin-linked ETF in the United States under the ticker BITI. The new fund went live on the New York Stock Exchange NYSE, TronWeekly reported.

Bitcoin ETFs Face An Uncertain Future

During the market turbulence in early June, Bitcoin ETFs plummeted as stocks trade sharply lower with some dropping as low as 70%.

Even though Bitcoin has slid back to the $20k range and the market remained on a bearish tone, sell-offs have eased now.

On June 27, Grayscale Investments announced that it is gearing up to work with bigwigs market makers Jane Street and Virtu Financial if the SEC approves their Grayscale Bitcoin Trust [GBTC] to be converted into a spot ETF.

GBTC then was trading at nearly a 30% discount to the net asset value. The discount would likely be removed if the trust converted to an ETF.

Moreover, the SEC’s decision on GBTC’s spot ETF application is expected to be announced by July 6th, 2022. Irrespective of the outcome, CEO Michael Sonnenshien reiterated that his firm is committed to converting GBTC from a trust to a spot ETF.

Inverse Bitcoin ETF beneficial for crypto: Grayscale CEO

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Grayscale CEO Michael Sonnenshein recently asserted on Twitter that the introduction of the first short Bitcoin exchange-traded fund (ETF) in the United States could be encouraging for the cryptocurrency sector.

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He thinks that the U.S. Securities and Exchange Commission’s approval of new BTC-related goods shows that the powerful regulator is gradually growing more at ease with the biggest cryptocurrency.

According to U.Today, on Tuesday, trading on the New York Stock Exchange (NYSE) began for the ProShares Short Bitcoin Strategy (BITI), which provides exposure to the inverse performance of the biggest cryptocurrency.

The SEC’s approval of ProShares’ Bitcoin futures ETF in October was seen as a turning point for the cryptocurrency market and rekindled the second stage of the 2021 bull run.

But the authority has so far turned down every application to allow a spot-based Bitcoin ETF. Currently, Grayscale is putting up a valiant campaign to persuade the SEC to turn its flagship trust into an exchange-traded fund. Sonnenshein has nevertheless emphasized that he is not identifying the recent correction’s bottom.

BTC’s price dropped to $17,500 on Saturday, but it was able to launch a small comeback after that. The top cryptocurrency experienced a rise on Tuesday, reaching a high of $21,708.

Bitcoin to Test $17,000 Again?

Former NYSE Group President Tom Farley recently claimed that the price of Bitcoin may end up retesting the $17,000 level during an appearance on CNBC.

Yet he considers the current price decline to be a “very wonderful” purchasing opportunity, suggesting that the cryptocurrency has at least temporarily struck a bottom. Farley is of the opinion that the market has already capitulated.

After a protracted run of losses, the largest cryptocurrency in the world was able to retake the $21,000 mark earlier today, marking a tiny success for bulls.

Arthur Hayes, the former CEO of BitMEX, forewarned on Monday that there would be additional forced selling as a result of market uncertainty. In the past, Paul Krugman, a Nobel Prize-winning economist, warned that the tiny comeback would just be a dead-cat bounce.

Chris Burniske, a cryptocurrency analyst, recently tweeted that he would not be surprised if BTC fell under the $10,000 mark. There is more possibility for a downturn because miners have not yet given in. Burniske also thinks that the unfavorable macro environment will make it difficult for Bitcoin to recover.

ProShares Debuts First Short Bitcoin ETF [BITI]

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ProShares is all set to unveil its first short bitcoin-linked ETF in the United States under the ticker BITI. The new fund will go live on the New York Stock Exchange NYSE.

According to the press release, BITI will provide investors a chance to profit from Bitcoin’s price dip or protect market exposure with the convenience of an ETF. Speaking of the new launch, ProShares CEO Michael L. Sapir stated,

“As recent times have shown, bitcoin can drop in value. BITI affords investors who believe that the price of bitcoin will drop an opportunity to potentially profit or hedge their cryptocurrency holdings. BITI enables investors to conveniently obtain short exposure to bitcoin through buying an ETF in a traditional brokerage account.”

Back in October 2021, ProShares created history when it successfully launched BITO, the first U.S. bitcoin-linked ETF, raking over $1 billion in assets in just two days.

The leading ETF issuer also curated the first BTC-linked mutual fund, BTCFX, in July 2021.

However, Bitcoin ETFs were being bamboozled as stocks trade sharply lower amid fears of a looming recession, with investors anticipating that the Federal Reserve may adopt a more hawkish stance by raising rates to curb surging inflation.

ProShares ETFs value dropped by 70%  

Last week, the performance of these exchange-traded funds that track Bitcoin through managed futures contracts was at their worst as these asset classes were trading all-time lows in the wake of a severe downswing in the crypto market.

As per various reports, the ProShares Bitcoin Strategy ETF, in particular, has fallen almost 70%.

In addition to that, other top ETFs Valkyrie Bitcoin Strategy ET and VanEck Bitcoin Strategy ETF have all hit record lows in the wake of the mega BTC selloff.

Bitcoin has dropped 69% from its previous peak, falling 55% this year alone, as as result the ETFs troupe went belly up.

The report also notes that the popular Grayscale Bitcoin Trust has been trading lower this year, by 60.1%. That’s not its lowest level on record, but it is a 20-month low for the fund.

Grayscale Investments Unveiled Europe’s First ETF

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The world’s largest digital asset manager Grayscale Investments’ plan of expanding its footprint in the European market got a new lease of life as it announced its first European ETF called Grayscale Future of Finance UCITS ETF [ticker: GFOF].

The newly launched ETF is slated to be listed on the London Stock Exchange [LSE}, Borsa Italiana, and Deutsche Börse Xetra will also be “passported for sale” across Europe.

For those unfamiliar, Passporting allows a firm registered in the European Economic Area [EEA] to set shop in any other EEA state without further authorization.

Coming back to the press release, the investment vehicle is designed to offer investors exposure to firms across domains like finance, technology, and digital assets – as well as firms shaping the digital economy, all through the familiar ETF wrapper.

In February 2022, Grayscale listed an ETF in the United States that tracks the investment performance of the Bloomberg Grayscale Future of Finance Index.

Speaking on the historic launch, Grayscale Investments CEO Michael Sonnenshein stated,

We announced our first ETF earlier this year in partnership with Bloomberg as part of the expansion of our business. With growing global demand from both institutional and individual investors for Grayscale products, we’re thrilled to be expanding our offering in Europe through the UCITS wrapper.

“This product draws upon our historical strengths while furthering our evolution as an asset manager that helps investors build portfolios that can stand the test of time. GFOF UCITS ETF is the natural next step in our global strategic journey,” he added.

The investment firm’s plan to enter Europe’s crypto market was the result of a number of meetings held with local partners, Sonnenshein said.

Grayscale’s Tussle With SEC

The European crypto fund market has become more competitive in recent months, with the arrival of several rival exchange-traded products [ETP] being listed in Switzerland, Germany, and elsewhere by firms such as 21Shares.

As of March, 73 crypto ETPs had been granted approval in Europe, with a total of $7 billion in assets.

Apart from making a mark in this market, Grayscale is also seeking to convert its bitcoin trust into an ETF in the U.S. but has been frustrated by the Securities and Exchange Commission [SEC].

The U.S. markets regulator has so far green signaled 4 BTC future ETFs but none that invest in the crypto directly.

Grayscale doubles down on its efforts for a Spot Bitcoin ETF

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Asset management firm Grayscale has renewed efforts to gain permission from the US securities watchdog in converting the world’s largest crypto investment vehicle into an exchange-traded fund.

As per a letter sent to the regulator, the asset manager is bolstering its application with the Securities and Exchange Commission to convert its $40 billion Bitcoin Trust into a spot Bitcoin ETF.

The latest move from Grayscale comes as the SEC is contemplating whether to give the green signal for US exchange-traded funds to hold bitcoin, rather than derivatives linked to the cryptocurrency, for the first time.

The investment firm is currently awaiting to hear back from the SEC in early July on a decision that would change its Bitcoin Trust into an ETF. If they are rejected, Grayscale Investments CEO Michael Sonnenshein has hinted that it is willing to flip the script and take SEC to court.

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While there is no doubt that Grayscale’s CEO has been one of the vocal SEC critics, he is not alone. In an interview, this month, Bitwise Asset Management’s Matt Hougan took note of the fallacy and said,

“The SEC is objecting on the grounds of manipulation concerns, but its specific request was to demonstrate that regulated CME markets are of significant size. Bitcoin is now an institutional market. It’s a market with institutional service providers, institutional investors, and a large and robust regulated futures market.”

Grayscale’s gambit is monumental for the crypto industry

Several other crypto firms have already been reprimanded in their attempts to open similar funds and Grayscale’s gambit represents one of the crypto industry’s last hopes of launching such a product in the near future.

But that has hardly acted as a deterrence. As ETF Trends CEO Tom Lydon pointed out that a growing number of financial advisors are interested in investing in a bitcoin ETF.

A 2022 Bitwise/ETF Trends Survey revealed that 82% of advisors prefer a spot bitcoin ETF over a futures-based alternative. The demand has also increased for bitcoin products that investors can purchase on traditional brokerage platforms, Lydon said.

Right now, there are not many choices, so it’s not going backward, he added. Crypto experts are still hopeful a spot bitcoin ETF could make its entry as early as this year.

Grayscale’s Bitcoin ETF application delayed yet again by SEC

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The U.S. Securities Exchange Commission (SEC) procrastinated its ruling on Grayscale’s pending application over Bitcoin’s exchange-traded funds (ETF) conversion proposal. The crypto asset management platform was seeking approval from SEC to convert its Bitcoin Trust (GBTC) into a well-developed ETF. This conversion was due to the concerns over maneuvering, liquidity, and clarity.

However, the notice published by SEC on Friday, 4 February 2022, didn’t bring something different to the table as it relates to Grayscale’s pending application. In the long notice that was published, the SEC particularly asks for “written comments” from “interested persons” among the general public to explain their “views, data and arguments” referring to the regulator’s concerns of maneuvering, liquidity, and clarity.

The notice goes on to say that the public has 21 days from today, as mentioned in the Federal Register, to submit written data, views, and arguments on whether Grayscale’s application should be granted or denied, with a 35-day window for rebuttal. Additionally, Individuals interested in submitting comments to the SEC can do so either electronically or on paper, according to the notification.

In a tweet, Bloomberg Intelligence’s James Seyffart pointed out that Grayscale’s delay meant an ultimate ruling on the push will be made in early July. He said,

“Annnnndd here it is. The official SEC delay on $GBTC attempt to convert to a spot Bitcoin ETF. 100% expected. Final decision date for $GBTC will be on/around July 6th.”

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Grayscale's Bitcoin ETF application delayed yet again by SEC 7

SEC’s history of rejecting Grayscale’s spot ETF applications

Grayscale, the world’s largest digital asset management firm, filed an application in October to convert shares of its Trust (GBTC) into a spot Bitcoin ETF, aiming to reverse the regulator’s previous rejections of BTC spot ETF applications. However, the SEC stated two months later that it would be postponing its decision on Grayscale’s application, citing market fraud, manipulation, and transparency as major issues.

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Grayscale's Bitcoin ETF application delayed yet again by SEC 8

Grayscale has $36.5 billion of assets as of February 4th, according to a tweet, with its GBTC product accounting for almost 71% of total assets. At the time of writing, Bitcoin (BTC) was priced at $41,483.65 and was seen on the bull run of 9.45% over the last 24 hours.

Another Spot Bitcoin [BTC] ETF in Canada while the US still awaits

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Fidelity Investments is prepping to launch a spot Bitcoin [BTC] ETF in Canada while its filings for the same are yet to receive the green light from the Securities Exchange Commission [SEC] in the United States. With respect to the financial service firm’s ETF, dubbed as the Fidelity Advantage Bitcoin ETF [FBTC], which would directly acquire physical BTC meaning the investment vehicle would purchase actual Bitcoin rather than obtain it via a derivative instrument.

The latest maneuver provides a much-needed shot to the arm for one of America’s leading brokerage entities having a total of $4 Trillion assets under management [AUM] is catering to its burgeoning clientele based in neighboring Canada. While in its home country, regulators are still figuring out whether or not to allow a spot BTC ETF.

This is not the first time spot BTC exchange-traded fund has been approved. A few days ago, Singapore became the newest entrant as it now offers a ‘Physical’ BTC fund created by its homegrown Fintonia Group. Citing the latest development, Ravi Menon, Managing Director of Monetary Authority of Singapore [MAS], noted that the best approach would be not to impose a total ban on these instruments. Speaking on the choice of the king coin, Adrian Chng of Fintonia reportedly said.

Bitcoin is an excellent form of collateral for loans. It trades 24/7 and is highly liquid, with approximately $30 billion to $60billion per day. If required, it can be quickly liquidated in comparison with, for example, commodities and real assets.

On the other hand, U.S firms’ have struggled so far to gain approval for the spot fund from the country’s top regulator. To top that, the recent development in Canada has irked many in the crypto community. One of them is prominent investor, Lark Davis who expresses his frustration with regards to SEC’s stance.

No Bitcoin [BTC] ETF in US?

So far, the market has welcomed a number of futures ETFs such as the ProShares Strategy and Valkyrie Bitcoin Strategy but the question arises as to when will the U.S. regulatory body would finally approve the first spot Bitcoin ETF? Steven McClurg, the co-founder of Valkyrie, in an interview with CNBC stated that a spot ETF ‘won’t be until at least middle of next year.’ Grayscale Investments, which recently filed to convert the popular BTC trust into a spot ETF, is also eyeing the same by summer 2022.

Even, David LaValle at Grayscale Investments who heads the ETFs division, stated in a MarketWatch interview that he too sees the possibility of regulators giving the green signal for a spot-bitcoin ETF by July next year.

Is Bitcoin ETF really a “less attractive version” of BTC?

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The highly-anticipated Bitcoin ETFs made an official debut on Wall Street this week. This has significantly spurred a massive rally and pushed the crypto market cap to a record $2.7 trillion. However, the investment vehicles has met with its fair share of criticisms.

Former National Security specialist and Whistleblower Edward Snowden took a dig at the big shot Venture Capitalists for heavily investing in what he claims to be “less appealing versions” of Bitcoin instead of allocating their resources to payment-related institutions which would aid in creating the very basic cash registers and applications solely focused on crypto payments. He ironically termed it as a ”Pro gamer move”. Snowden, in his latest Twitter post, stated,

VC guys keep trying to make cryptocurrency a global standard by spending billions to invent less-attractive versions of Bitcoin, instead of just buying payment-system companies to make the most common cash registers and apps support crypto payments by default. Pro-gamer move.

Prominent Bitcoin advocate and Co-founder of Morgan Creek Digital, Anthony Pompliano aka ‘Pomp’ too chimed in to denounce top-level executives as well as investors and founders who take undue advantage “from simply plugging into the bitcoin network.” According to the exec, these market players onboard millions of individual straight away to start working for them without paying a dime.

Bitcoin ETF boon or bane?

Supporters of the flagship cryptocurrency have been advocating the idea for a spot Bitcoin ETF instead of a Futures product as they prefer to own crypto assets rather than through a derivatives portfolio. One of the key arguments against the futures-based bitcoin ETF is that managing those contracts can be extremely expensive, compared to its spot counterpart.

Another interesting factor that needs to be considered are that Contango and Backwardation are unique to the futures product market. The market is said to be in contango when prices of a futures based contract are higher in comparison to a spot price. On the other hand, when the forward future product is lower than the price of spot, the market is said to be in Backwardation. Critics believe that the above conditions do not provide a efficient exposure to BTC for investors.

Many speculates that even trusted digital assets management firm like the Grayscale Investments, with their portfolio called GBTC, may not be as effective in accurately tracking bitcoin prices since there has been instances when it traded at a much higher prices to the underlying asset in the past. At present, it is trading at a discount price to bitcoin amidst investors dumping the product due to the recent entry of ProShares ETF.

It is a waiting game for now. There are many pros and cons to weigh in and gauge how the market players respond in the near future. The launch of these investment vehicles for the institutions have been pivotal and it may subsequently pave the way for such funds for retail investors soon.

3 reasons why Bitcoin [BTC] can rebound despite dull market conditions

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Bitcoin [BTC] underwent a swift recovery, after topping out a little below $40k. The ongoing downside price action has left the investors concerned.

The latest side-way movement of price had taken shape since the dramatic fall in May and has extended to the new quarter as well. The drop was so damaging that it ended the winning streak for the digital asset which witnessed its prices surge above $60,000 for the first time in its decade-long history.

However, this trend could potentially come to an end as institutional players could soon push the asset’s price higher. Here are three reasons why a potential uptrend could be right in the inkling:

Institutional players’ comeback

One of the major recurring narratives for Bitcoin has undoubtedly been the Institutional adoption for both 2020 and 2021. While the entry of these players boosted the price of the token, after Tesla’s latest actions, institutional adoption seems to have taken a hit considerably.

But according to a key member of the crypto-analytic platform, Santiment, the price of the king coin can potentially continue to range until mid-July this year, before the institutional players in the market drive the new BTC resistance level up to $40k. The analysis also read,

“When you are enjoying yourself in the rain [especially when you were a child]. You lose track of all time. Bitcoin price is experiencing the same thing for this month.”

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3 reasons why Bitcoin [BTC] can rebound despite dull market conditions 11

June-December 2019 Resemblance

The resemblance of Bitcoin’s current price action to that of June-December 2019 is uncanny. In fact, the flagship crypto-asset had surged all the way above the $14k in the last week of June 2019. Shortly after which it spiraled down as FUD entered the market in the form of Bitcoin Cash [BCH] hard fork, the then US President Donal Trump’s take on the token among other news.

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3 reasons why Bitcoin [BTC] can rebound despite dull market conditions 12

Six months later, Bitcoin slashed over half of its gains and turned down to $6.5k. As a result of the decline, the charts saw death cross formation. However, as bulls bought the dips, Bitcoin recovered and slowly formed lower highs surging briefly to $10k.

Coming down to the present scenario, the latest trend could suggest a similar profit-taking phase, and a period of FUD that was sparked by Elon Musk’s announcement, China’s clampdown on cryptocurrency activities, etc.,

Grayscale Bitcoin Trust

Many well-known cryptocurrency analysts are of the opinion that the Bitcoin market could get a lift in July from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust [GBTC], and not downward pressure as earlier reported by JPMorgan strategists.

One of the main possibilities that some market speculators see is the foray investors to the coin market to buy BTC and repay crypt loans used for the purpose of financing their original purchases of the GBTC shares. Meaning, that while selling GBTC shares does not eliminate the risks of deeper discounts that could potentially ward off capital inflow, but, this adversary can be compensated by the repurchases of the cryptocurrency in the spot market.

Along the same line, Amber Group, the digital asset service provider tweeted,

“Lots of bearish chatter around GBTC unlocks whilst conveniently ignoring that in-kind subscriptions funded by debt will ultimately translate into spot buying,”

Grayscale Total Assets Under Management Reaches $50 Billion

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Investment giant, Grayscale has reached a new milestone of $50.6 billion in cryptocurrency assets under management [AUM] on the 14th of April. The AUM figure has been quite impressive, increasing by an incredible 2,400% from a mere $2 billion at the beginning of 2020.

The Grayscale Bitcoin Trust [GBTC] continued to dominate the charts and accounted for a whopping $41.44 billion, while the Ethereum Trust [ETHE] trailed behind with $7.42 billion followed by the remaining trusts, including Litecoin trust [LTCN], Ethereum Classic Trust [ETCG], and Bitcoin Cash [BCHG], with $405.5 million, $267.4 million and $234.3 million respectively.

Grayscale has witnessed a rise in its total AUM figure by over $3 billion right after its plan to further diversify its crypto-trust offerings that involved the addition of five new tokens for their eligible accredited investors.

Grayscale Bitcoin Fund [GBTC] Vs GLD fund 

With the latest surge, the asset manager is inching closer to the largest Commodities ETF, the SPDR Gold Trust GLD which has $57.70 billion in assets. And there are certain industry experts that speculated this could happen soon. Senior Commodity Strategist, Mike McGlone, for one, believes that the firm’s Bitcoin Trust would eventually overtake the most popular gold-pegged ETF SPDR Gold Trust [GLD] in the coming days. His tweet read,

“Bitcoin Trust on Track to Surpass World’s Largest Commodity ETF – In a world going digital, we believe gold symbolizes the diminishing potential for sustained commodity-price advances, notably vs. Bitcoin. The crypto is a prime example of how advancing innovation suppresses.”

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Grayscale Total Assets Under Management Reaches $50 Billion 14

Grayscale had announced its plans of converting its main product GBTC into an ETF. Hence, if approved, this would make the platform accessible to an even wider section of investors at a much lower cost. While the SEC is yet to give a green light to such an investment offering, but if approved Grayscale would easily become the second-largest commodity ETF just behind the SPDR Gold Shares.

The world’s largest cryptocurrency has surfaced as the growing choice of market participants around the world. This, in turn, prompted North American regulators to approve a few Bitcoin ETFs. As opposed to the Bitcoin’s bull season, Gold, on the other hand, has continued its downtrend starting after the first quarter of 2020.