- SEC commissioner Hester Peirce confirms the high demand for approval of a Bitcoin Exchange Product on the U.S.
- First Bitcoin ETF approved in North America by Canadian regulator.
One of the most esteemed figures in the cryptocurrency community, SEC commissioner Hester Peirce, has reconfirmed her pro-Bitcoin stance. In an interview for Coindesk, Peirce also known as “Crypto Mom”, stated that there is a high demand for a Bitcoin Exchange-Traded Product (ETP) to be approved. Referring to the approval of exchange-traded products by other regulators, most recently in Canada, Peirce said the agency is aware of the trend, adding:
I feel (that trend) reinforces my position, I gave it several years ago. We are ready for a Bitcoin Exchange Product. I would like to see an Exchange Product move forward. Facts and circumstances matter, but I think people are looking for ways to access Bitcoin via our regulated market.
If the regulator continues to deny institutional investors a means to obtain regulated exposure to Bitcoin, the SEC Commissioner worried that “less cost-efficient” ways would be adopted. Indeed, there are a number of firms that offer exposure to the cryptocurrency.
The most prominent name is Grayscale with its Grayscale Bitcoin Trust (GBTC). However, investors have to abide by certain conditions, which include paying a premium of at times more than 40% above the spot market price of BTC. The service includes custody fees and other services offered by Grayscale.
Another popular option among institutional investors is to use Coinbase Pro, which also requires a premium to be paid. This was +$452 when the bitcoin price was near $43,000 and varies depending on the movement in the spot market. The remaining options for institutions looking to gain exposure to BTC are limited and in many cases involve secondary risks, such as custody of their own funds.
Bitcoin ETF receives approval in Canada
In a completely different scenario, the Ontario Securities Commission has decided to approve a Bitcoin ETF. The product was introduced by Purpose Investments to the regulator as instrument 11-102, according to the Ontario Securities Commission’s filing for the 10 provinces and 3 territories that form the country.
These include British Columbia, Alberta, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon, and Nunavut. Bitcoin ETF units are denominated in the Canadian dollar and U.S. dollar under the symbol BTCC on the Toronto Stock Exchange.
In the proposal, the firm recounts the potential risk factors of gaining exposure to Bitcoin which include the possibility of the “emergence of a competitor, its high volatility, and the introduction of new regulations”.
The primary custodian of the BTC funds will be Cidel Trust Company in conjunction with Gemini Trust Company, as sub-custodian pursuant to an agreement between the fund managers. Canadian user “Crypto Mags” explained the differences and advantages of the Bitcoin ETF compared to Grayscale:
A Bitcoin ETF is different from Grayscale ($GBTC) and other *closed-end funds in the Canadian market (3iQs $QBTC and CI Galaxy (BTCG.U). ETFs issue units on an ongoing basis. This should help with the premiums at which these Funds / Trusts trade versus NAV (due to demand for 2 limited units).