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The BITO ETF Starts Trading Tomorrow. Here’s What That Means for GBTC.

Investors have been clamoring for a way to invest in Bitcoin (CCC:BTC-USD) via Wall Street for a long while now. This week, that chance will finally become a reality through ProShares’ Bitcoin ETF (NYSE:BITO). Of course, investors are taking huge interest in the exchange-traded fund (ETF). However, they are also shifting attention toward other firms who have been foaming to get an ETF to market. Among the most discussed is Grayscale, which is now jumping on its opportunity to get a product on Wall Street through its Grayscale Bitcoin Trust (OTCMKTS:GBTC).

Bitcoin tokens on a motherboard representing BTC.
Source: Momentum Fotograh / Shutterstock.com

With the incoming BITO ETF, investors are going to have a chance to invest in Bitcoin. However, they won’t have to expose themselves to the crypto’s rampant volatility. The incoming fund deals in trading Bitcoin futures contracts, providing a safer and more convenient method of profiting off of the coin than buying and holding currency oneself.

One thing to note about the coming fund is that crypto bulls aren’t entirely happy with it. While investors are happy to come up on an option for investing in Bitcoin, the fund doesn’t deal directly in the currency; rather, BITO offers exposure only to derivatives tied to Bitcoin.

BITO ETF Has Crypto Bulls Calling for Direct Exposure to BTC. Grayscale Wants to Deliver.

Grayscale, a crypto-centric investing firm, is looking to get investors exposure directly to the currency; it wants to do this by turning its Bitcoin Trust, GBTC, into an ETF.

Grayscale’s GBTC trust is one of the largest funds for holding Bitcoin in the world, and it’s entirely comprised of Bitcoin. This is the product that most crypto bulls are looking for; those unsatisfied with the BITO ETF are looking to see GBTC come to Wall Street as an ETF.

Well, Grayscale is heeding these wishes. Today, it is announcing that it plans to file to have its Bitcoin trust converted into an ETF upon receiving a formal indication that the Securities and Exchange Commission (SEC) will approve it. Indeed, the BITO ETF is an SEC-approved product, but because its exposure is much less direct than GBTC’s, there’s no guarantee that Grayscale will be met with the same warm welcome by the committee.

Of course, even when Grayscale makes the official filing, investors will have to sit and wait; the review process will take over two months once made. However, the fact that the BITO ETF is making its way to Wall Street this week is a promising sign that Grayscale may not be far behind.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2021/10/the-bito-etf-starts-trading-tomorrow-heres-what-that-means-for-gbtc/.

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