Galaxy Digital CEO Mike Novogratz says the U.S. Securities and Exchange Commission (SEC) will green light a Bitcoin exchange-traded fund (ETF) under the leadership of Gary Gensler.
In a new iConnections interview, Novogratz argues that current investment vehicles in the crypto space such as the Grayscale Bitcoin Trust (GBTC) give retail investors a raw deal, and Gensler is unlikely to allow the status quo to remain unchallenged.
“The biggest owner of Bitcoin in the world is the Grayscale Trust, right. It’s a closed-end fund run by Barry Silbert’s group. It is a brilliant piece of business. They have $25 billion worth of Bitcoin. They charge 2% annual fee. Plus, they make money on the way trading in. Most of that money comes from people putting Bitcoin in their fund, so borrowing Bitcoin, putting it in their fund, seasoning it for six months, and then getting shares of the trust.
So if you want to think about it, it’s hedge funds arbitraging retail. That’s what it is. There’s no other way to think about it. So you’re the SEC, you would not let an ETF through but you let this project through where retail is getting the short end of the stick. Makes absolutely no stinking sense. I cannot believe Gary Gensler will let that go on for that much longer.”
Novogratz adds that a Bitcoin ETF does not bode well for Grayscale.
“What is I think is going to happen is the SEC is going to allow an ETF which is better for retail. The ETF is going to drag all the new liquidity and that premium on the Grayscale Trust is going to collapse.”
The head of Galaxy Digital predicts a Bitcoin ETF will be approved within the next 12 months.
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