Grayscale Prepares for Bitcoin ETF Race Despite Regulatory Limbo

One of the most anticipated events involving Bitcoin in the United States is the approval of an Exchange-Traded-Fund (ETF) built on the digital asset.  A greenlight on such a product would truly make Bitcoin accessible to the masses.  Although an ETF is by no means needed for Bitcoin to thrive, it is widely believed that one would expedite its already impressive growth.

While various companies prepare for this eventuality in the U.S., other countries such as Brazil continue to approve ETFs based on digital assets.

Grayscale + BNY Mellon

In late June, we touched on Bitcoin ETFs within the U.S., and a pair of fresh applications for such a product.  Despite the state of limbo in which these applications find themselves, companies such as Grayscale investments continue to prepare for an ETF.  This was just made evident as the company announced a strategic partnership with BNY Mellon – the world’s largest custodian of financial assets.  This partnership, which is said to give Grayscale ‘improved scalability, resiliency, and automation’ will see BNY Mellon take on various roles.

• Fund accounting
• Administration
• Transfer agency services
• ETF services

Grayscale specifically notes that this move was taken in anticipation of the eventual conversion of its Bitcoin Trust in to an ETF.

Grayscale Investments CEO, Michael Sonnenshein, commented on this partnership,

“Engaging BNY Mellon is an important milestone as part of our commitment to converting Grayscale Bitcoin Trust into an ETF…BNY Mellon has a long-standing reputation as a trusted provider and has established one of the first teams dedicated to servicing the growing digital currency asset class. We are pleased that BNY Mellon will join a group of Grayscale's best-in-class service providers, helping us deliver a seamless, industry-leading investment experience.”

The Grayscale Bitcoin Trust (GBTC) is already a wildly popular investment product, with over $20 billion in assets at time of writing.  Despite moves such as these, there has been no indication that the SEC will change its tune on a Bitcoin ETF any time soon.

Brazil

Moving south of the United States, the situation surrounding ETF’s based on digital assets is much clearer.  Months-ago Brazil became one of the first nations to approve a Bitcoin based ETF.  Since that time, multiple others have been approved, with the most recent example built on another top digital asset – Ethereum.

This move, which was made possible through custodial services on offer by Gemini, is being spearheaded by QR Capital.  It will see its upcoming fund listed on B3 stock exchange.

QR Capital notes that by offering this Ethereum based ETF, investors can ‘gain direct exposure to Ethereum’ in a simple and safe manner ‘without worrying about registrations in exchanges, wallets, or private keys’.