Spot Bitcoin ETFs Poised to Tap $30 Trillion Market, Says Grayscale CEO

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Grayscale Investments expects the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) to allow the $30 trillion advised wealth market to gain exposure to bitcoin. “I do think there is a lot of optimism in the market,” said the crypto asset manager’s chief executive. “I think a lot of investors are adding bitcoin to their portfolios.”

Grayscale’s CEO Sees Much Optimism in the Market

The CEO of crypto asset manager Grayscale Investments, Michael Sonnenshein, discussed his perspective on bitcoin and the market’s expectations regarding the potential approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) in an interview with CNBC and Bloomberg on Monday.

“If you look back at this year, the price appreciation you’ve seen in bitcoin has really been driven by both the macro and micro forces,” he told CNBC. “On the macro front, inflationary pressure [and] rising rates have caused investors to think about bitcoin as a store of value, or a hedge in their portfolios.”

The executive added: “On the micro front, earlier this summer when my team had our court victory, I think that certainly unlocked a lot of optimism amongst investors about GBTC and the prospects for it to uplist as a spot bitcoin ETF.” Grayscale has applied with the SEC to convert its bitcoin trust (GBTC) into a spot bitcoin ETF. Despite the initial rejection by the regulator, Grayscale contested the decision in court, resulting in a court order mandating the SEC to reevaluate the application.

“I do think there is a lot of optimism in the market,” Sonnenshein opined. “A lot of investors are adding bitcoin to their portfolios, and when we look ahead to the hopeful approval for spot bitcoin ETFs, it really is going to unlock the opportunity to a part of the investment community that … has unfortunately been locked out of the opportunity to participate in having bitcoin exposure in their portfolios.” The executive clarified:

We’re really talking about the advise market here in the U.S., which is today about $30 trillion worth of advised wealth.

“We hope the approval of spot bitcoin ETFs [and] the uplisting of GBTC will allow for that opportunity and those investors to partake in it as well,” he noted.

In an interview with Bloomberg on Monday, the Grayscale chief shared his expectation that the SEC will approve multiple spot bitcoin ETFs at once. “We’ve publicly been advocates of the fact that when the commission is ready to give the requisite approvals for spot products to come to market, that it should be done all at once — the issuers who are operationally ready to launch their products should come out the gate all at once,” he stated, elaborating:

I think that the SEC should and does, in fact, want to create an even playing field.

Regarding the cash model versus the in-kind model for spot bitcoin ETFs, Sonnenshein said Grayscale prefers the in-kind redemptions. “Our positioning here is that the model works, it works well, it protects investors, it creates tight spreads, it creates liquidity, and ultimately creates a positive investor experience,” he detailed. However, the executive stressed: “As we’re at this pivotal moment to actually finally see spot-bitcoin ETFs come to market, we shouldn’t be breaking with convention.”

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