The SEC didn’t respond to a request for comment from Bloomberg News.
In addition to the four pending applications for a crypto ETF, there are other filings that appear to be seeking to sidestep SEC reticence by combining Bitcoin with other assets.
For example, Simplify Asset Management is working to launch an “equity plus Bitcoin” ETF that will invest up to 15% of its assets in cryptocurrencies indirectly through the Grayscale Bitcoin Trust (GBTC). Bitwise Asset Management filed for a fund filled with companies considered to be crypto innovators.
“With Canada recently approving Bitcoin ETFs and Gary Gensler poised to serve as SEC Chairman, optimism abounds,” said Nate Geraci, president of the ETF Store, an advisory firm. “Every issuer with any hope of having a meaningful Bitcoin ETF presence should be throwing their hat in the ring at this point.”
One of those is arguably Grayscale Investments, the firm behind GBTC. That’s an investment trust as opposed to an ETF, meaning there are different rules around share creation and trading.
Nonetheless, it’s been a smash hit, ballooning in size to more than $37 billion, up from only $1.9 billion a year ago. Now Grayscale is recruiting an entire ETF team, apparently in anticipation that the first American exchange-traded crypto products will eventually be approved.
Bitcoin’s price has skyrocketed around 10-fold in the past 12 months. The digital asset climbed above $60,000 for the first time this weekend before dropping to below $56,000 by Tuesday morning in New York.
With so much potential cash involved, the SEC should consider approving multiple filings at once to “avoid giving any issuer a significant first-mover advantage,” James Seyffart, ETF analyst for Bloomberg Intelligence, wrote in a recent note.
If that happens, the funds currently trying their luck with applications could be richly rewarded.
“All of these firms want to be at the starting line with their feet on the blocks if and when the SEC pulls the trigger,” said Johnson at Morningstar.
This article was provided by Bloomberg News.