Opinion: Bitcoin is no longer considered a ‘passing fad’

The participation of major investment firms in the race to launch the spot bitcoin-ETF demonstrates that the leading cryptocurrency is no longer a “passing fad”. This was stated by Grayscale Investments CEO Michael Sonnenshein, The Block reports.

According to him, market participants are “responding positively to the entry of traditional financial institutions into Bitcoin.” The trend lends it additional value, the head of the company added.

“Recent news … underline the resilience of this asset class in a broader sense, and many investors view [digital gold] as a unique investment opportunity,” added Sonnenshein.

On June 15, BlackRock submitted a SEC filing for a spot Bitcoin-ETF. Following the financial giant, similar requests came from Valkyrie, Fidelity Investments, WisdomTree and Invesco.

In the list of applications to the Commission ARK Invest and 21Shares have priority based on when they were filed.

Subsequently, the aforementioned revised proposals were sent to the agency, taking into account the Commission’s criticisms of the so-called joint surveillance agreement or details of this mechanism. The latter became a key addition to BlackRock’s application.

Against this backdrop, Grayscale Investments’ GBTC rose by 57%, the discount to NAV narrowed from 41.7% to 29.3%.

In 2021 the SEC approved ProShares and Valkyrie Investments products based on Bitcoin futures on the CME. To date, the Commission has rejected all spot-based ETF proposals for digital gold.

In October 2021 Grayscale filed a request to convert GBTC into an exchange-traded fund. On December 17 the agency delayed ruling on the petition to February 2022. On June 30 Grayscale filed a lawsuit against the SEC following a negative response.

Earlier, the company suggested that the Commission may have violated the Administrative Procedures Act in approving a futures-based Bitcoin ETF while rejecting spot-based applications.