May. 16, 2022
I own Bitcoin directly and also through the GBTC ETF. There are certain accounts where the only way to gain exposure to Bitcoin is through this (and other ETFs). GBTC ETF owns the Bitcoin directly while all other ETFs gain Bitcoin price exposure via derivatives. I DO NOT want to own Bitcoin in this manner. First off, ETFs that use derivatives to track their index are highly inefficient and are extremely expensive for long-term investors (due to the required rolling transactions needed to remain invested). I do not want long-term money invested in vehicles like this. The only option available to a US investor in certain accounts is to own GBTC. This is a closed fund so it trades at a discount to NAV. The entity has requested to be able to convert the ETF to a spot ETF. This would 1) eliminate the closed structure and also eliminate the trading discount, 2) become a more pure way to gain exposure to Bitcoin (as long as they remain 1:1 backed, as they are now), and 3) would lower the expense ratio on the ETF since the structure would be changed, and 4) become one of the best vehicles for normal day-to-day investors to gain exposure to this burgeoning (and very important) asset class. It makes no sense for the derivative-based ETFs to have already been approved and for spot-based ETFs to have not been approved. Frankly, it is suspicious why a perfectly valid investment vehicle that would provide benefit to many has not been approved to date. Thanks, Joey -- Joey Dean