Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Grayscale Hires ETF Head in Push to Convert Biggest Bitcoin Fund

CryptocurrencyAug 04, 2021 15:08
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

(Bloomberg) --

The company behind the largest cryptocurrency fund is building out its ETF team, despite dimming odds that U.S. regulators will approve the structure this year.

Grayscale Investments LLC has tapped David LaValle, former chief executive officer of custom index provider Alerian, as its global head of exchange-traded funds. He will drive the effort to convert the $25 billion Grayscale Bitcoin Trust (ticker GBTC) into an ETF -- a process that CEO Michael Sonnenshein has said the asset manager is “100% committed” to.

Grayscale has been ramping up its ETF arm even as the U.S. Securities and Exchange Commission drags its feet on allowing cryptocurrencies into the structure. In addition to LaValle’s hire, the firm is seeking to fill at least 10 other ETF-related roles.

Grayscale also announced last month that it would partner with Bank of New York Mellon (NYSE:BK) for ETF services following GBTC’s conversion. The efforts reflect the firm’s ambition to become a leading ETF issuer, according to LaValle.

“We’re focused on creating a number of products to be a world-class ETF issuer,” he said in a phone interview. “We’re in a unique position. We actually have a product in the marketplace, so it puts us in a great spot.”

Read more: SEC’s Gensler Readies More Crypto Oversight to Protect Investors

If converted, GBTC would immediately become the third-largest commodity ETF. Only the $60 billion SPDR Gold Shares (NYSE:GLD) and $29 billion iShares Gold Trust (IAU) command more assets, according to data compiled by Bloomberg.

Converting GBTC into an ETF would also likely solve a persistent problem for Grayscale: the trust’s discount. The product’s price has traded below its underlying Bitcoin holdings since March as the crypto craze cooled.

The discount is currently around 10%, after reaching 21% in May.

Exacerbating the situation is the fact the trust’s outstanding shares -- which can’t be destroyed -- ballooned by hundreds of millions over the past 12 months as Bitcoin soared to a record.

Converting to an ETF would mean that shares could be redeemed, allowing specialized traders known as authorized participants to arbitrage away the discount.

“A conversion to an ETF would very likely collapse that discount,” LaValle said.

©2021 Bloomberg L.P.

 

Grayscale Hires ETF Head in Push to Convert Biggest Bitcoin Fund
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email