SEC Should Allow Investors To ‘Pick Their Own’ Bitcoin Exposure: Head Of ETFs In Grayscale


The Securities and Exchange Commission (SEC) is still hesitant to approve the many requests to create a much-anticipated bitcoin exchange-traded fund (ETF), and a major player in the industry is calling on the SEC to give investors a choice.

David LaValle, managing director and global head of ETFs at Grayscale, said the SEC should allow investors to “choose their own exposure that meets their own investment needs and their own investment thesis.”

SEC Chairman Gary Gensler has expressed mixed enthusiasm for investment vehicles that provide exposure to crypto assets.

In August he suggested He may be more willing to support the formation of products related to bitcoin futures (contracts that bet on the future price of bitcoin), but is concerned about what he sees as a lack of investor protection in the Crypto’s “Wild West”.

The SEC has so far rejected a number of ETF applications in hopes of tracking the price of bitcoin itself (often referred to as a spot ETF product).

LaValle has said he would prefer the SEC to bless both a bitcoin futures ETF product and a bitcoin spot ETF product at the same time.

“We believe the SEC should really take a fair approach to allowing investors to choose the type of bitcoin exposure in the form of an ETF that they want,” LaValle told Yahoo Finance’s All Markets Summit Plus: Crypto Investing (a grayscale sponsored event) Monday.

‘Glimmer of hope’

Grayscale currently offers investors exposure to bitcoin through its Grayscale Bitcoin Trust (GBTC). But private placement in the trust is only available to accredited investors, which is why LaValle hopes to convert the trust into an ETF – if regulators approve it.

“Bitcoin can be a bit difficult for many investors to figure out how to seek exposure or store it reliably and have a component of their portfolio to invest in this asset class. I think the ETF opens up the pool to a much wider investment universe, ”said LaValle.

Davis Polk Capital Markets Group partner Joseph Hall told Yahoo Finance there could be reasons for optimism about the SEC’s approval of Bitcoin ETFs.

Hall noted that the commission denied previous bitcoin ETF requests based on market manipulation, primarily in overseas markets. An example: “wash trading”, in which a trader buys and sells a coin with the sole aim of pumping volume and intentionally deceiving the market.

But Hall pointed out that the manipulation would have an impact on the futures markets as well, meaning that any support for a bitcoin futures ETF could show a “decreasing” emphasis on the rationale historically used by the commission for denying an ETF on the market. bitcoin cash.

“At least I would say there is a silver lining in the direction President Gensler seems to have here,” Hall said on Monday in the same panel.

Brian Cheung is a reporter covering Fed, Economics and Banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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