There’s no doubt that the biggest powerhouses in the spot Bitcoin (BTC) exchange traded fund (ETF) race are BlackRock and Fidelity. However, two other heavy hitters in the form of Grayscale and ARK Invest may have better leverage against their rivals.
The radars of traditional finance (TradFi) institutions and the crypto community are all tuned on the US Securities and Exchange Commission (SEC) right now as everyone awaits the agency’s ruling on all the pending spot Bitcoin ETF applications under its jurisdiction. Among the applicants, the entry of BlackRock and Fidelity sure made a lot of noise because of their strong foothold in the assets management sector.
Grayscale and ARK Invest, however, appear to be in a better position against the other heavyweights. First of all, both institutions have been trying to get into the game years before their competitors.
BlackRock and Fidelity’s Spot Bitcoin ETF Entries
BlackRock came in late in the scene after a seesawing statement from its CEO, Larry Fink, about the digital asset. It should be noted that the exec once called Bitcoin “an index of money laundering” before shifting his allegiances when the cryptocurrency started taking off. But to the company’s credit, it should be noted that its spot Bitcoin ETF filing was one of the main contributors to the current bullish swing of BTC.
Fidelity’s entrance came as no surprise considering that its Director of Global Macro Jurrien Timmer earlier commented about Bitcoin’s “unique advantage” over gold. But with the company’s founding going way back to 1946, its move served as a further reaffirmation to the growing trust of TradFi in the digital asset.
The Grayscale Advantage
For Bloomberg Intelligence ETF analyst Eric Balchunas, Grayscale is uniquely positioned against others because all it needs is to convert its Bitcoin Trust (GBTC) into a spot ETF. Even after getting rejected by the SEC numerous times for its spot Bitcoin ETF filing, GTBC has already held around $27 billion in assets and processes $150 million worth of transactions daily.
Balchunas believes that if GBTC were to be converted into a spot Bitcoin ETF and launched in its current version, it would immediately capture the top 1% of the market. So, to keep a “level-playing-field” for the participants, SEC will likely nerf Grayscale right out of the gate to prevent a “kingmaker” scenario.
ARK Invest’s Edge
Cathie Wood’s ARK Invest, on the other hand, has more than $100 million lying in wait to be unleashed once its spot Bitcoin ETF is greenlit by the SEC. Days ago, ARK closed its GBTC position as it cited “tax and regulatory uncertainties” as reasons for the pullout. After that, the funds were moved to ProShares’ Bitcoin futures ETF.
Balchunas claimed that the Bitcoin futures ETF may only be a “temporary parking spot” for ARK’s funds as it awaits verdict for its spot Bitcoin ETF filing in the US. Like Grayscale, the company seems to be prepared already for the potential surge of volume and flows with its haul.
“Flows and volume are crucial in the marketing of an ETF,” said the Bloomberg analyst.