Page 19 - Investment Advisor May 2021

ALTERNATIVE INVESTMENTS

By Bernice Napach

Grayscale Plans to Convert Bitcoin Fund to ETF

Also, as the trend continues, Fidelity files for its own Bitcoin ETF.

G rayscale, the sponsor of Bitcoin ETF filing Fidelity said: “The
In a statement released following its
Grayscale
Bitcoin
Trust
(GBTC), the largest Bitcoin
cantly in recent years, creating an even
fund, said in early April that it is “100% digital ecosystem has grown signifi-
committed to converting GBTC to an more robust marketplace for investors
ETF,” but “the timing will be driven by and accelerating demand among insti-
the regulatory environment.” tutions. An increasingly wide range of
To date, the Securities and Exchange investors seeking access to Bitcoin has
Commission has not approved any underscored the need for a more diver-
Bitcoin or other cryptocurrency ETF, sified set of products offering exposure
though several applications are pend- to digital assets.”
ing before the agency, and three Bitcoin
ETFs are trading on the Toronto Stock GROWING NUMBER OF BITCOIN
Exchange in Canada and available only public companies must file when listing ETF APPLICATIONS
in Canada. new securities and that exchanges must VanEck, WisdomTree, Skybridge
A sponsor of one of those ETFs, CI file to list those securities. Capital in partnership with First Trust
Global Asset Management, has just The firm said when GBTC, which has Advisors, Valkyrie Digital Assets and
launched a Bitcoin mutual fund in $34 billion in assets, is converted into an NYDIG Asset Management have all filed
Canada, also available only in Canada. ETF, investors owning publicly traded for Bitcoin ETFs with the SEC, which
The fund, called the CI Galaxy Bitcoin GBTC shares will automatically receive had rejected several Bitcoin ETF appli-
Fund, will invest “all or substantially the ETF shares, whose management fee cations in the past.
all of its assets in the CI Galaxy Bitcoin “will be reduced accordingly.” Chris Kuiper, vice president of equity
ETF,” with which it intends to merge research at CFRA, said the Fidelity fil-
later this year. The subadvisor for the FIDELITY FILES FOR BITCOIN ETF ing was “big news” given that “Fidelity
ETF and the fund is Galaxy Digital Fidelity Investments, one of the first is one of the largest asset managers
Fund Management. asset managers to engage with crypto- around with trillions of dollars in assets
Grayscale first filed an application currencies, also has filed an application under management.
with the SEC for a Bitcoin ETF in 2016 with the SEC to launch a Bitcoin ETF. “We think this shows the continuing
but ultimately withdrew its application According to the filing, the Wise demand for a bitcoin ETF as well as
following discussions with the SEC that Origin Bitcoin Trust would track the the continued infrastructure being built
lasted “the better part of 2017,” accord- performance of Bitcoin as measured by around bitcoin products. Fidelity has
ing to Grayscale’s announcement. the Fidelity Bitcoin Index PR, which actually been a leader in the space with
Firms typically withdraw applications continually updates Bitcoin prices their digital assets division so it is not
that are facing rejection at the SEC, throughout the day based on feeds surprising they will be looking to create
which is what several firms have done, from multiple spot markets and a vol- an ETF,” he said.
though at least one of those firms, Van ume-weighted median price method- Kuiper expects the Fidelity ETF,
Eck, followed up with a new Bitcoin ology. Fidelity Digital Assets Services, if approved, will be “a very competi-
ETF application. which launched in late 2018, would tive and low-cost fund” that would
“While several firms have submitted serve as custodian. help expose many investors to Bitcoin,
Bitcoin ETF applications in the form Fidelity already has introduced “including possibly those in 401(k) plans
of an S-1 or 19b-4 to the SEC, we are the Wise Origin Bitcoin Index Fund managed by Fidelity.”
Adobe Stock and engagement with the SEC,” said investors and requires a minimum Bernice Napach can be reached at
I, which is available only to qualified
confident in our current positioning
Grayscale, referring to SEC forms that
$100,000 investment.
[email protected].

MAY 2021 INVESTMENT ADVISOR 17