New reports coming out today are revealing that Grayscale, which offers its unique Bitcoin trust fund in the crypto space, is going to rely on BNY Mellon for banking services starting in October.
Danny Nelson at Coindesk goes over this emerging deal, noting that it’s part of a bigger strategy for Grayscale to move toward a new Bitcoin ETF option.
However, as Nelson acknowledges, the SEC has been less than helpful in introducing Bitcoin ETFs into the American market. Over the past few years, we have been watching proposals to the SEC for a BTC ETF fold, one after another, for lack of eventual approval.
Nelson refers to the regulatory body as hyper-skeptical on letting Grayscale turn the Bitcoin trust fund into an ETF.
Meanwhile, Canada has ETFs already, and analysts suggest they are cratering the premium around Grayscale’s fund.
“Grayscale is losing the number one spot as the most popular Bitcoin investment product for institutional investors,” wrote Nivesh Mustgi for Crypto Briefing in March. “The GBTC trust saw a net inflow of 6,599.9 BTC in February, as measured by Glassnode. The inflow was significantly less…than the previous month when the fund added 41,568 BTC. In comparison, Purpose’s Bitcoin treasury added 10,215.9033 BTC last month. … According to JP Morgan’s analysis shared by media outlet The Block, the Canadian Bitcoin ETF is one of the two reasons behind a Grayscale premium drop.”
The Grayscale fund, which has $22 billion in assets, may be at a disadvantage, but it remains a common Bitcoin play for U.S. investors. Where corporations may be more likely to buy up massive amounts of Bitcoin directly as a treasury asset, some are going the GBTC route, and most small investors probably prefer the fractional BTC investing that GBTC allows.
Will Grayscale be successful where so many others have failed? Watch this space.