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Spot bitcoin ETF issuers: What you need to know

On Wednesday, January 10, the US Securities and Exchange Commission approved eleven spot bitcoin ETFs. Among the approved spot bitcoin ETFs were ones from Grayscale, Fidelity, and Bitwise. Yahoo Finance sat down with some of spot bitcoin ETF issuers this week. Here are some of their top takeaways.

Ark Invest Founder, CEO, & CIO Cathie Wood (00:00:17)

Ark Invest Founder, CEO, and CIO Cathie Wood notes three of the “competitive advantages” in Ark Invest's ETF, the ARK 21Shares Bitcoin ETF (ARKB). “One is our infrastructure and operation,” Wood says, “the second is research… The third competitive advantage we have is a sales force that started selling our exposure to bitcoin in 2016.” Wood adds, “we are looking at bitcoin as a public good. It is essentially, from a technology point of view… going to be the financial super highway of the internet.”

Grayscale CEO Michael Sonnenshein (00:01:09)

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Grayscale CEO Michael Sonnenshein discusses “three things” regarding fees as the company’s spot bitcoin ETF, Grayscale Bitcoin Trust (GBTC), is charging a 1.5% fee, which is above many of the other spot bitcoin ETF fees. “Number one, we made a commitment to our investors that we would lower our fees… we made good on that promise and we’ve reduced fees by 25 percent,” Sonnenshein explains. “Number two, investors should have choice… And three… GBTC is differentiated. It brings a market value to investors that I think they know and appreciate.”

Bitwise Asset Management CIO Matt Hougan (00:02:02)

Bitwise Asset Management CIO Matt Hougan explains “two things” he thinks investors will look for in spot bitcoin ETFs. One is “what is the lowest fee product, cause the less you pay the more you get in finance,” Hougan notes. “And then who has the support systems to provide research and answers and data to execute trades well… the combination of crypto expertise and low cost, we think is a winner for” the company's spot bitcoin ETF, Bitwise Bitcoin ETF (BITB).

WisdomTree Global Head of Research Christopher Gannatti (00:02:22)

WisdomTree Global Head of Research Christopher Gannatti discusses why “it's going to be among the most competitive dynamics that we believe we have seen at WisdomTree in the ETF industry.” “Everyone is providing exposure to the same underlying spot oriented bitcoin ETFs. Many of the providers also waving the fees to zero, at least initially for various points of time and amounts,” Gannatti notes. The firm manages its own bitcoin fund under the ticker (BTCW).

Senator Cynthia Lummis (R-WY) (00:03:12)

Senator Cynthia Lummis (R-WY) explains that “when the traditional financial services industry has now adopted and recognized the long-term benefits of bitcoin specifically, as part of a diversified asset allocation. It helps make the case for having a robust, regulatory framework for digital assets so that investors can begin to further diversify their investments and incorporate a long-term store of value like bitcoin into their investment strategies.”

Video Transcript

[MUSIC PLAYING]

JULIE HYMAN: The Securities Exchange has now approved some of the spot Bitcoin ETFs.

SEANA SMITH: We did see Bitcoin ETFs, I think it's fair to say, get off to a very solid encouraging monster start here for Wall Street.

CATHIE WOOD: Typically in a situation like this where there are a lot of competitors, the market consolidates. So we would expect that to happen. We hope and trust that we will be one of the winners. We have some competitive advantages. There are three competitive advantages that I think are very important.

One is our infrastructure and operations. The second is research. And then the third, and this is not to be underestimated, the third competitive advantage we have is a Salesforce that started selling our exposure to Bitcoin in 2016. We are looking at Bitcoin as a public good. It is essentially, from a technology point of view, going to be the financial superhighway of the internet.

MICHAEL SONNENSHEIN: I think there's three things to say about fees. So number one, we made a commitment to our investors that we would lower our fees. I've come on this show countless times talking to you about it. We made good on that promise and we've reduced fees by 25%.

Number two, investors should have choice, right. There are 11 spot Bitcoin ETFs coming to market today. And it's really not without GBTC, the lawsuit that we won, that we would not have otherwise forged ahead and made a path for all of these products to come to market. And three, to your point, GBTC is differentiated. It brings a market value to investors that I think they know and appreciate.

For many investors and because GBTC has been trading since 2015, we've had investors come into our fund on days, we've had investors come out of our fund on days. The same will be true with GBTC now being an ETF. We're actually more focused on inflows and growing the fund.

MATT HOUGAN: Two things I think investors will look for are what is the lowest fee product because the less you pay, the more you get in finance. And then who has the support systems to provide research and answers and data to execute trades well? Who knows how this market works? The combination of crypto expertise and low cost we think is a winner for BITB.

CHRISTOPHER GANNATTI: Everyone is providing exposure to the same underlying spot-oriented Bitcoin ETFs. Many of the providers also waiving the fees to 0 at least initially for various points of time and amounts. So it's going to be among the most competitive dynamics that we believe we have seen at WisdomTree in the ETF industry. If the supply is outpacing-- or is outpaced by the demand, you can have a very positive price dynamic.

And that's what we ultimately expect. We just don't know the time frame in the sense that was there some anticipation of this approval baked in Do you see a little buy the rumor, sell the news for a couple of days here. We'll have to see how the short-term, essentially, gets moderated into the medium and long-term, which we think can be quite positive.

CYNTHIA LUMMIS: When the traditional financial services industry has now adopted and recognized the long-term benefits of Bitcoin, specifically, as part of a diversified asset allocation, it helps make the case for having a robust regulatory framework for digital assets so that investors can begin to further diversify their investments and incorporate a long-term store of value like Bitcoin into their investment strategies.