Grayscale CEO Michael Sonnenshein on Bitcoin ETF: This is important week for digital assets
- ProShares could begin trading on Tuesday because the 75 day review period ends today
- It is important for investors to access Bitcoin as futures as well as based on spot prices
- GBTC is the largest BTC fund with 3.5% of the total supply
Grayscale CEO Michael Sonnenshein joins CNBC’s ‘Squawk Box’ to discuss the first Bitcoin (BTC/USD) ETF to trade in U.S. markets and what that means for other digital assets. He believes this is an important week for digital assets because investors have been waiting for the first Bitcoin ETF for some time.
A risky bet on future prices?
The host pointed out that development was a bet on the future price and asked Sonnenshein how it might affect the possibility that the government will regulate the underlying commodity or currency. Sonnenshein responded:
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If the SEC has cleared the way for a Bitcoin futures ETC…we certainly believe the future and spot prices are interrelated …it does clear the way for the SEC to approve a Bitcoin-backed ETF and give further validation to the industry.
Too late to see an about face
Is there any chance the SEC will stop the fund? ProShares Bitcoin Strategy ETF filed an application exactly 75 days ago. Unless the U.S. Securities and Exchange Commission (SEC) explicitly objects, ProShares could begin trading on Tuesday because the 75 day review period ends today. Sonnenschein says anything can happen and they’re looking out for that signal, but it’s not likely.
The host drew attention one more time to the difference between a product trading in futures as opposed to the underlying asset and the regulation. Sonnenshein pointed out that there was great excitement over Bitcoin ‘anything’ and it was important for investors to access it as futures as well as based on spot prices.
Will Grayscale be hit by the competition?
Is Grayscale going to be affected by the Bitcoin futures ETF as competition? Sonnenshein says GBTC (Grayscale Bitcoin Trust) products are something investors are typically interested in. He pointed out it was the largest BTC fund with 3.5% of the total supply, adding:
The success of this product proves that a physically backed product is the way that investors want to access this. Ultimately, having both those options in the market is a good thing.
Does this put pressure on Grayscale fees? Sonnenshein says:
We stand ready to reduce our fees when we come into the market with a Bitcoin ETF. There’s certainly going to be competitive pressure as more products come…but it’s too early to say what this landscape is going to look like.