ETF Report takes the pulse of the cryptocurrency space, including the performance of leading cryptocurrencies and the top related news items
ETFs Quick To Buy ‘COIN’
ETFs aren’t typically the vehicle of choice for folks looking for exposure specifically to a single stock. If you wanted to jump into Coinbase’s debut as a publicly traded entity, buying shares of Coinbase itself was probably just right for you.
But ETFs are an excellent choice for anyone who’s looking for diversified access to a part of the market, even if that part can seem like a very narrow segment or theme.
As eyes focus on Coinbase and its splashy IPO, you may be looking to access this newly listed crypto exchange through an ETF if you’re bullish on crypto assets in general; like investing in exchanges and capital markets broadly as an investment theme; or because betting on IPOs is your thing but you want to minimize single-stock risk
On day one of Coinbase’s IPO, there were already five ETFs that offered direct access to the stock, according to Bloomberg data. This list should grow every day as other funds add the stock to their mix, but these funds were first movers when the stock first started trading:
- ARK Innovation ETF (ARKK)
- ARK Next Generation Internet ETF (ARKW)
- ARK Fintech Innovation (ARKF)
- Amplify Transformational Data Sharing ETF (BLOK)
- First Trust U.S. Equity Opportunities ETF (FPX)
Grayscale Committed To ETF Conversion
Don’t think that the launch of a U.S.-listed bitcoin ETF will spell the end of the Grayscale Bitcoin Trust (GBTC). In fact, GBTC itself will be converted into an ETF at some point, according to a blog post from issuer Grayscale published in April.
Grayscale said that it is “100% committed to converting GBTC into an ETF,” and indeed, the firm would have already done so if it were able. But the regulatory environment hasn’t been kind to any potential crypto ETFs, so the firm, like others, has had to wait.
If and when the SEC does finally open the doors to a bitcoin ETF, GBTC, which currently has a 2% annual fee, will seamlessly make the transition. “When GBTC converts to an ETF, shareholders of publicly traded GBTC shares will not need to take action and the management fee will be reduced accordingly,” Grayscale said.
Grayscale’s blog post may be an attempt by the firm to shore up the price of the trust, which has fallen to a discount to its net asset value amid competition from other products that provide bitcoin exposure, including Canadian bitcoin ETFs.
Unlike ETFs, GBTC doesn’t have an effective arbitrage mechanism to do away with that discount, and so it was trading 11.5% below NAV on April 9.
What The Winklevoss Twins Are Up To
It remains to be seen whether the SEC will approve a bitcoin ETF this year, but if it does, it will have been a long road to get here. The first filing for a bitcoin ETF was made all the way back in 2013 by Cameron and Tyler Winklevoss.
Of course, the Winklevoss Bitcoin Trust never saw the light of day, but the Winklevoss twins have not stood still in those past eight years. Forbes has a good profile of the twins and what they’ve been up to.
The brothers are involved in numerous blockchain-based ventures, including their crypto trading platform Gemini and the digital art auction platform Nifty Gateway.
They see blockchain-based technologies revolutionizing industries across the board, including social media—a space they were intimately familiar with during their college days when they feuded with Mark Zuckerberg over who came up with the idea for Facebook.
“The idea of a centralized social network is just not going to exist five or 10 years in the future,” predicted Tyler Winklevoss.
Source: CoinMetrics; data as of 3/31/2021