Gonna start a thread laying out a case as to why @EricBalchunas and I are putting odds at 75% for a Bitcoin Futures ETF coming to the U.S in October. Here's where we view the odds of the ETF getting first approval 1/x
Originally we had ProShares way out in front but as @DaveNadig pointed out in a note. And @tpsarofagis pointed out in the table below-- Valkyrie is the only product that's been filed without reference to Canadian Bitcoin ETFs or other Bitcoin related instruments for exposure 2/x
We have two thought processes here. The First: the SEC has already approved a mutual fund with this exact same Canadian BTC ETF language from ProFunds/Proshares -- BTCFX. So if they approved this why would they deny an ETF with the same language? profunds.com/prospectus/pro… 3/x
The 2nd is that Gensler was pretty damn explicit in his August 3rd comments that started this part of the Bitcoin ETF race -- about being "limited to CME bitcoin Futures". But i honestly feel like we're trying to read the tea leaves like people read the Fed minutes. Who knows 4/x
As to why we are bullish on approval there are a multitude of reasons. 1. Gensler understands crypto. But a key event was the SEC forcing VanEck & ProShares to withdraw their Eth Futures ETFs just 2 days after filing. But didn't for the bitcoin products.. 5/x
Another key event was Gensler's Sept 29 comments where he reiterated support. I mean I can't fathom the SEC deciding to include these comments voluntarily with plans to deny all those ETFs less than a month later. That just pyschopath level cruelty IMO if that happens. 6/x
We're definitely in the minority on our call here as evidenced by this Genesis Trading poll where 71% of respondents said the chances of a launch were 50/50 or less 7/x:
Going back a bit to the inclusion of Canadian ETFs. To me this makes sense. Its just another release valve different from moving out on the futures curve. Its logical. Especially after the shitstorm created by $USO in April 2020 when it hit position limits as oil went negative..
Here's my current list of every US/Canada crypto ETF filing (that I'm aware of). It's an absurdly long list and its been a long 8+ years. 10/x
So, what's after this assuming a futures ETF is approved this month? Not sure but it seems like the SEC may want more regulation on the underlying crypto market before approving a 'physical'/spot Bitcoin ETF. Even though we think that structure is a better product for investors.
All of that said. The SEC has pulled the rug on approval so many times before I can't help but wonder what's around the corner. We (and all the potential issuers) are basically Charlie brown trying to kick a football
Also gonna put it out there that we initially went on the record calling for an October approval back on August 24. Soooo we're not just jumping on the bandwagon out of nowhere :) ... Though we've been wrong plenty before haha
Okay too many questions about #Bitcoin ETFs and zero flows -- a few quick thoughts:
1. On any given day, the vast majority of ETFs will have a flow number of ZERO -- this is very normal. There are ~3,500 ETFs in the US. Yesterday 2,903 of them had a flow of exactly zero
2. Shares are created or destroyed in creation units. This ONLY happens when there is a mismatch in supply in demand. And that mismatch has to be large enough to justify tapping the underlying market and a ~bigger mismatch than a creation unit.
3. Creation units are the lots that ETF shares are created and redeemed in. Every ETF can have a different sized creation unit. In the case of the spot #Bitcoin ETFs they are blocks of shares ranging from 5,000 shares to 50,000 shares.
It’s happening! @Grayscale just filed to launch the “Grayscale Bitcoin Mini Trust” expecting this to have a competitive fee. It will trade under the ticker $BTC and will come from a spinoff from $GBTC. This means $GBTC holders will get some % of holdings spun off into $BTC.
Here’s the language around the spinoff. There is no fee disclosed yet orrr what % of $GBTC will spin off but pretty sure this will be a non-taxable event for a chunk of those shares to get into a cheaper and cost competitive product.
First spoke about the potential that they would do this back in 2021.
Wrote about the FTX bankruptcy estate position and sales yesterday. Mainly how they were likely impacting more than just $GBTC
$BITW specifically looks like it got hit by a big seller (logical to guess it was FTX)
Also. Everyone was fixated on FTX in the last week as *THE* seller of $GBTC shares. The largest "known" holder of GBTC is actually DCG itself. I'd honestly be surprised if DCG hasn't been part of this GBTC selling. Probably other institutions in very similar situations
UPDATE: They're just pouring in. We have another spot #Bitcoin ETF S-1 (prospectus) amendment tonight. This one is from @BlackRock. SEC is obviously giving multiple issuers the same or very similar instructions.
@BlackRock This one dropped 65 minutes earlier than BlackRock:
What does this mean? Without having read them -- it just means that the wheel is still turning. Both the SEC and these issuers are working hard to iron things out. These filings are likely the result of many conversations and a lot of man hours on/between both sides.
New Research note from me today. We still believe 90% chance by Jan 10 for spot #Bitcoin ETF approvals. But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur
Delay orders were issued by the SEC for BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity & Valkyrie at the same time. If the agency wants to allow all 12 filers to launch -- as we believe -- this is the first available window since Grayscale's court victory was affirmed
This window for all 12 ends by 11/17. But theoretically SEC could make a decision on the first 9 on this list at any point from now until Jan 10, 2024.
I've added a column for those that have provided amended S-1's/prospectuses (ive been repeatedly asked about this on here)