An interesting trend seems to be developing among institutional players if their interest in the flagship cryptocurrency, Bitcoin, continues to rise. This interest is in no small part due to the frenzy surrounding the Spot Bitcoin ETFs, which could well be approved sooner or later.
Other ETFs that consider Bitcoin as an investment option
Crypto commentator and music producer Marty Party recently signed the crypto community’s attention to an emerging trend among fund managers and their ETFs. He noted how these asset managers are adjusting the prospectus of the funds they manage so that they can gain exposure to Bitcoin.
It is said that these institutions are looking to use 15% to 50% of the assets under their management to gain exposure to BTC. One way they plan to achieve this is through the Spot Bitcoin ETFs that could do just that possibly launched soon.
Marty Party specifically highlighted the case of Advisors Preferred Trust, which is already seeking SEC approval to invest up to 15% of its assets under management in Bitcoin-related ETFs such as Grayscale’s Bitcoin Trust (GBTC) and ProShares Bitcoin Strategy ETF.
Michael Saylor, executive chairman and co-founder of MicroStrategy, had done just that previously hinted that something like this would happen soon enough. He then suggested that more institutional players put more of their capital into Bitcoin.
A rule implemented by the Financial Accounting Standards Board (FASB) has also paved the way for more companies like MicroStrategy to include BTC on their balance sheets.
The launch of Spot Bitcoin ETFs will also make it easier for these institutional investors to gain direct exposure to the flagship cryptocurrency.
For a long time, those previously interested in the crypto token had to invest in Bitcoin futures ETFs or other Bitcoin derivatives on exchanges such as the Chicago Trade Fair (CME). But this is changing with the possible approval of a Spot Bitcoin ETF.
BTC price holds $45,000 | Source: BTCUSD on Tradingview.com
Shades of Gray Leading the “Cointucky Derby”
As recently highlighted by Bloomberg analyst James SeyffartGrayscale seems to be taking the lead, assuming everything pending Spot Bitcoin ETFs were approved simultaneously. This is because the asset manager has already established itself with GBTC and would likely have more capital than other issuers at launch.
Bloomberg analyst Eric Balchunas marked this fact and hinted that the Securities and Exchange Commission (SEC) could therefore decide not to launch Grayscale on day one. If that doesn’t happen and all the funds launch at the same time, Grayscale will likely have some sort of first mover advantage.
However, other asset managers will try to assert their dominance by using different strategies. One such strategy is for these issuers to undercut themselves when it comes to the fees they charge to manage their respective funds. Invesco has already announced it that they will waive fees for the first six months and the first $5 billion in assets.
Featured image of Finra, chart from Tradingview.com
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