CRYPTO NEWS

Grayscale Investments Set to File for Bitcoin Spot ETF as Competition Heats Up 

Grayscale Investments, known for its Grayscale Bitcoin Trust (GBTC), is planning on filing an application to convert its flagship fund into a spot ETF early next week. Grayscale, which has been the dominant player in the digital asset space, is now looking to revamp its fund due to competition. 

First Bitcoin Futures ETF Set to Trade Early Next Week, Adding More Competition for Grayscale

Last Friday, the Securities and Exchange Commission (SEC) approved the first ever Bitcoin futures ETF, which is set to trade on the New York Stock Exchange early next week. The move has been hailed as a “watershed moment” by many, where Bitcoin is finally solidifying its legitimacy as an asset class to Wall Street and mainstream investors. 

Related Reading | Bitcoin ETF Receives Approval from SEC, Marking Historic Day for Crypto 

Bitcoin (BTC/USD) dipped slightly following a rally to monthly highs of $63,000, before retracing back to $61,000. Source: Tradingview.com

The ETF, managed by investment firm ProShares, will feature a low management fee of 0.95%, compared to Grayscale’s 2%. Another benefit that the new ETF provides is the lack of redemption periods – something that has plagued GBTC’s investors since its very inception. 

Why Grayscale’s Potential Spot Bitcoin ETF May Outperform Futures ETFs

The Bitcoin-futures ETF is a step in the right direction in making cryptocurrencies more accessible for the everyday investor; however, many crypto investors have argued that the ETF’s utilization of derivative contracts, which are traded on the Chicago Mercantile Exchange (CME), would prove to be far inferior compared to a spot ETF holding actual Bitcoin. 

Related Reading | Grayscale Looks to Bolster Investment Offerings with 13 more Cryptos, Including Polygon, Solana, and ICP 

Contango, which is a phenomenon that occurs when futures prices are above expected future spot price, means that investors will lose out potential gains due to the Bitcoin futures contracts expiring higher than the cryptocurrency’s spot price. Joe Orsini, director of research at Eagle Brook Advisors, explained the following disadvantages in his Twitter thread: 

Futures-based #bitcoin ETFs? Buyer Beware.

A thread on contango, using USO ETF (a futures-based ETF on crude oil) to compare performance of Spot WTI Crude, 1st-month Crude Futures, and a futures-based ETF.

1/n pic.twitter.com/04Rv1m7NKB

— Joe Orsini, CFA (@JoeOrsini_) October 15, 2021

If approved, Grayscale’s spot Bitcoin ETF would be backed by actual Bitcoins, rather than derivatives that track the cryptocurrency’s price. Grayscale already has a significant portion of the world’s circulating Bitcoin supply. 

Grayscale Bitcoin Trust (GBTC) assets under management rebounded $39B as Bitcoin (BTC) prices jumped past $60,000 following the news of SEC’s Bitcoin futures ETF approval. Source: Glassnode.com

Barry Silberts, the founder of Digital Currency Group and Grayscale Investments, took to Twitter to hint at upcoming changes for GBTC. He joked, “[f]riends don’t let friends buy and hold futures-based ETFs.” Though, there may be some truth behind the statement yet. 

Featured image from UnSplash

Ethereum (ETH) could target $2400 despite falling below $2000 again

Ethereum (ETH) has fallen below $2000 once again. The coin had managed to post some gains after bottoming at $1700 a few weeks ago. However, that upward momentum has slowed, and we may see some decline. But this is not necessarily something to worry about. Here are some key points: The recent decline below $2000::Listen

Ethereum (ETH) has fallen below $2000 once again. The coin had managed to post some gains after bottoming at $1700 a few weeks ago. However, that upward momentum has slowed, and we may see some decline. But this is not necessarily something to worry about. Here are some key points:

  • The recent decline below $2000 doesn’t appear to be strong

  • ETH will likely rebound almost instantly in a few days

  • The coin will regain $2000 and trigger a buying frenzy that pushes ETH to $2400

Data Source: TradingView 

Ethereum price analysis and prediction

After falling to $1700 just two weeks ago, ETH has managed to hold out. There were worries that the coin would touch $1000 in what could have been its worst downtrend this year. However, ETH quickly recaptured $2000 but has since lost it again. In fact, over the last 7 days, the coin has struggled to maintain the price above the $2k mark. 

However, we expect this time round things to be different. Although ETH is slightly below $2k, the coin will likely regain this important threshold in the days ahead. This will send a crucial bullish signal that will likely trigger demand for ETH. The coin will shoot up to $2400 before it slows. 

But there are some important risks. For example, if the current fall below $2000 turns out to be more serious than expected, this thesis becomes invalidated. If anything, failure to hold the $1800 support could push ETH toward $1500 in the short term.

How to profit from ETH in the short term?

The long-term value of Ethereum has never been in doubt. But short-term volatility will be here for the rest of the year. 

The best way to profit right now is to buy once the price consolidates above $2000. But if you are not sure about the possible risks, you can watch the coin and see if it breaks $1800. Once this happens, $1500 will be a great entry point.

The post Ethereum (ETH) could target $2400 despite falling below $2000 again appeared first on Coin Journal.

Grayscale Investments Set to File for Bitcoin Spot ETF as Competition Heats Up 

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