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Bitcoin

Gemini co-founder Cameron Winklevoss said the SEC's refusal to approve a spot Bitcoin ETF has been a "complete and utter disaster for U.S. investors."

For the last decade, the United States securities regulator has forced investors into “toxic” and “unregulated” crypto products, says Gemini co-founder Cameron Winklevoss.

On July 2, the Winklevoss twin slammed the U.S. Securities and Exchange Commission (SEC)'s constant refusal of spot Bitcoin exchange-traded funds, noting it's now been 10 years since the twins first filed to get their own ETF approved by the regulator.

“The [SEC's] refusal to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates how the SEC is a failed regulator.”

Winklevoss argued that without an approved spot Bitcoin ETF, U.S. investors have been pushed into “toxic products like the Grayscale Bitcoin Trust (GBTC) which trades at a massive discount" to the price of Bitcoin and charges “astronomical” fees.

Today marks 10 years since @tyler and I filed for the first spot Bitcoin ETF. The @SECGov's refusal to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates how the SEC is a failed regulator. Here's why:

-"protected"… pic.twitter.com/xmK1xo1iX8
— Cameron Winklevoss (@cameron) July 2, 2023

GBTC’s NAV discount is currently at 30% compared to Bitcoin’s price, according to YCharts, while the GBTC annual fee is 2%, compared to an average of 0.40%, according to the latest July 2022 study from financial services firm MorningStar.

Winklevoss also believes the refusal has led to U.S. investors moving to “unlicensed and unregulated” offshore platforms, including FTX, which he called “one of the largest financial frauds in modern history.”

“Maybe the SEC will reflect on its dismal record and instead of overstepping its statutory power and trying to act like the gatekeeper of economic life, it will focus on fulfilling its mandate of investor protection,” he opined.

Winklevoss’ comments come as a flurry of companies has recently filed, renewed, or amended their filings for a spot Bitcoin ETF including BlackRock, Fidelity, WisdomTree, Invesco, Valkryie and ARK Invest.

The SEC has reportedly said some of the filings for spot ETFs are inadequate and not “sufficiently clear and comprehensive.” The regulator has asked for the fund managers to resubmit after clarifying their filings language.

Meanwhile, Gemini is in a protracted court mediation with Genesis, a subsidiary of Digital Currency Group (DCG) which also owns Grayscale — the manager for the GBTC. The exchange is also in court on charges from the SEC.

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$27 trillion AUM is perched over Bitcoin and crypto: CoinShares CSO

June 27, 2023 Coin Telegraph

AUM

The top eight financial institutions with an interest in Bitcoin and crypto have a whopping $27 trillion in combined assets under management.

There is at least $27 trillion of assets managed by major U.S. financial institutions that are also “actively” seeking to provide clients with exposure to Bitcoin (BTC) and crypto.

On June 26, CoinShares chief strategy officer Meltem Demirors highlighted at least eight major financial institutions that have signaled moves in the digital assets space, including BlackRock’s spot Bitcoin ETF filing and Fidelity’s crypto wealth management solutions.

Others include JP Morgan, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco and Bank of America.

“Many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more,” she noted, adding that there is a whopping $27 trillion in assets under management between them.

1/ last week's @BlackRock spot Bitcoin ETF filing was big news!

but, it's not the only story. many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more.

a quick glance - $27 trillion of client assets here! pic.twitter.com/azmHZmUL2a
— Meltem Demirors (@Melt_Dem) June 26, 2023

Earlier this month, BlackRock’s June 16 spot Bitcoin exchange-traded fund application led to a wave of filings for similar products, boosting a narrative that suggests “institutions are coming” for Bitcoin.

BTC price reached a 2023-high of $31,185 on June 24 amid surging confidence, according to CoinGecko.

Demirors however noted that while "the institutions are coming,” it’s still more of a trickle than a wave. "We're seeing the bridges being built in real-time," she added.

It should be noted that the $27 trillion figure is an estimation of the total assets under management across the eight institutions and only a tiny portion of this would likely be allocated to crypto investments.

Nevertheless, Reflexivity Research co-founder, Will Clemente, still echoed Demiror’s sentiment, pointing out that Bitcoin’s market capitalization is less than $600 billion.

“Between HSBC, Blackrock, Fidelity, and Schwab we are talking about $25 trillion in assets under management that will soon be enabled to buy Bitcoin.”

Institutional investors are already showing more interest in Bitcoin-related funds. The ProShares Bitcoin Strategy ETF (BITO) saw its largest weekly inflow for a year pushing AUM over $1 billion, as reported by Cointelegraph.

Earlier this week, Federal Reserve Board of Governors member Michelle Bowman criticized the absence of a crypto regulatory framework claiming that the uncertainty over the asset class traps institutions in a “supervisory void.”

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Bitcoin ETF fever returns: ‘Biggest’ inflow to ProShares’ BITO in a year

June 26, 2023 Coin Telegraph

BITO

ProShares’ BITO Bitcoin ETF saw a weekly inflow of $65 million as institutional investors have seemingly regained their mojo for Bitcoin futures.

Bitcoin (BTC) exchange-traded fund (ETF) fervor is back with a raft of new applications and an increase in capital inflows from institutional investors.

On June 26, a surge of inflows to the ProShares Bitcoin Strategy ETF (BITO) — a Bitcoin futures fund — was observed by Bloomberg senior ETF analyst Eric Balchunas.

The fund had its largest weekly inflow in a year at $65.3 million with its assets topping $1 billion.

BITO was the first BTC-linked ETF in the United States and is one of the most popular among institutional investors.

Balchunas claimed BITO “pretty much has tracked Bitcoin perfectly,” lagging spot prices by 1.05% annually and has a fee of 0.95%.

The Bitcoin Futures ETF $BITO had its biggest weekly inflow in a year as assets top $1b again. It also traded half a billion in shares on Friday, which it's only done about 5 times before via @SirYappityyapp pic.twitter.com/Xrq0lUaaTO
— Eric Balchunas (@EricBalchunas) June 25, 2023

The BITO fund has made a 59.6% gain since the start of 2023 according to ProShares. There’s been an uptick in Bitcoin derivatives interest across the board since BlackRock filed for its own Bitcoin ETF on June 15.

According to the Deribit crypto options exchange, Bitcoin futures open interest (OI) has surged since last week. It is currently $319 million as of June 25, up around 30% from the same period last week.

OI is a measure of the total number of outstanding futures contracts that have not been settled.

*BTC futures OI over the past month. Source:* *Deribit*

The resurgence in ETF trading and the resultant BTC price pump has also been good news for the world’s largest crypto asset manager, Grayscale. The Grayscale Bitcoin Trust (GBTC), which has been trading at a massive discount to spot BTC prices for months, is heading in the right direction as that gap diminishes.

According to Coinglass, the Grayscale premium, also known as its discount, is -31.2%. It fell as low as -49% in December.

It remains unclear if the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF, but the race is now on as a new wave of filings has followed BlackRock’s.

WisdomTree, for the third time, filed with the SEC to create a spot Bitcoin ETF, just hours later Invesco renewed its application for a similar product.

On June 25, ETF Store President Nate Geraci tweeted his list of ETF issuers that he “would keep an eye on” as he believes they will file or refile for a spot Bitcoin ETF based on past filings. Geraci named First Trust, VanEck, Global X, Fidelity, and what he called the “dark horse,” Schwab.

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Institutions ‘extremely interested’ in crypto ETFs, but buying has cooled: Survey

April 4, 2023 Coin Telegraph

asset manager

Almost half of surveyed fund managers plan to “add” crypto ETFs to their portfolio in 2023, while only a quarter will be increasing digital asset exposures.

Institutional interest in cryptocurrencies hasn’t budged despite the market being down 60% from the all-time highs (ATH), as a majority of asset managers stated they’re “extremely interested” in crypto themed-Exchange Traded Funds (ETFs).

On April 3, financial services firm Brown Brothers Harriman (BBH) released its 2023 Global ETF Investor Survey which polled 325 institutional investors, financial advisors, and fund managers from the United States, United Kingdom, Europe and China.

It found nearly three-quarters of institutional investors claimed they’re “extremely” or “very” interested in crypto ETFs, but the effects of crypto winter have chilled their appetite as only a quarter said they’re expecting to increase allocation to crypto ETFs over the next 12 months, a 6% fall from 2022.

The findings of our 2023 Global ETF Investor survey are out. Explore the report to learn about the shifts ETF investors are making in the face of macro and market changes, and what the last decade in ETFs can tell us about the next ten years. https://t.co/KeTeAUfz8G #ETFs pic.twitter.com/ueDlwvynNQ
— Brown Brothers Harriman (@bbh) April 3, 2023

While crypto-themed ETFs fell down the priority list for some — nearly half still plan to “add” crypto ETFs to their portfolios this year to diversify investments.

*58% of fund managers in China are looking to add crypto ETFs to their portfolios, followed by the U.S. (55%) and Europe (29%). Source:* *BBH*

BBH explained the rise in interest for crypto ETFs is partly due to fund managers learning to stomach the inevitable volatilities in the crypto market:

“As investors adapt to volatility, they are diversifying their portfolios and adding more innovative products. Even with a tumultuous year in crypto, interest hasn’t cooled entirely.”

BBH believes a clearer crypto regulatory framework will further increase the demand for related ETF exposure as it will provide more “comfort” when doing business with the crypto sector:

“Initiatives such as the draft regulation from the EU’s Markets in Crypto Assets proposal is expected to significantly ‘derisk’ investments in crypto assets for asset managers and provide an ‘additional layer of comfort’ for fund managers to engage with crypto exchange.”

More than 40% of the respondents claimed to manage assets worth more than $1 billion and over half said to have more than a quarter of their portfolio invested in ETFs.

Among the largest crypto ETFs are ProShares Bitcoin Strategy (BITO) available on the New York Stock Exchange (NYSE) and the Bitwise 10 Crypto Index Fund (BITW). BITO was reportedly the first bitcoin-linked ETF launched in the United States, while BITW tracks the top 10 largest cryptocurrencies by market cap.

Grayscale’s Bitcoin Trust (GBTC), while not an ETF, is one of the largest digital asset investment products by market cap traded on a stock exchange with a current value of $11 billion according to Google Finance.

Not all crypto ETFs have fared well as the effects of the crypto market winter saw two Australian crypto ETFs — BetaShares Crypto Innovators ETF (CRYP) and Cosmos Global Digital Miners Access ETF (DIGA) — take the title as the worst-performing ETFs in the country.

It resulted in DIGA, along with Cosmos Purpose Ethereum Access ETF (CPET) and Cosmos Purpose Bitcoin Access ETF (CBTC) being delisted at the end of 2022.

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Two U.S. SEC Commissioners Blast Their Own Agency for Rejecting VanEck Bitcoin Exchange-Traded Fund Application

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exchange traded fund