Per a report from the Cambridge Center for Alternative Finance (CCAF), fossil fuels have been the primary energy source for BTC mining since the start of the year. The CCAF recently updated its Cambridge Bitcoin Electricity Consumption Index (CBECI). Its study claims that 62% of all the energy the leading token has consumed so far consists of coal-based energy. BTC’s Energy-Intensive Mining Bitcoin employs the proof-of-work consensus mechanism to create new tokens and validate transactions on the blockchain. The PoW…
There’s no doubt that Bitcoin is an excellent and highly profitable investment asset. Investors globally, especially holders, made millions recently when Bitcoin increased in prices. In fact, as the coin is currently retracing, investors are maximizing bitcoin’s volatile nature.
However, even though the coin is profitable, some investors do not have access to its benefits. The requirement of technical expertise and the risky nature of the coin always makes investors shy away.
Some platforms have been coming up recently, including bitcoin trusts, mutual funds, and ETFs, to help individuals invest in bitcoin risk-free. Today, we will be focusing majorly on ETFs.
ETFs are a type of investment in the class of Exchange-traded products. They are similar to mutual funds but trading in the day like securities. Bitcoin ETFs give investors exposure and access to bitcoin but in a more secure manner. Recently, ETFs have been gaining traction.
The Rise of Bitcoin ETFs
US investors have been anticipating Bitcoin ETFs since 2013 when Tyler Winklevoss and Cameron filed for the first ETF. However, the SEC rejected the first and second applications. Others began applying over the years, but the SEC rejected most of the earlier ones.
However, in early August 2021, SEC chair Gary Gensler signaled the possibility of the US accepting bitcoin futures ETFs. Immediately several platforms applied for the BTC futures ETFs.
Contenders in The Bitcoin ETF Race
SEC received several applications from different institutions after the announcement. Others are also planning to apply soon. All those platforms are now in a race to be the first in launching the ETFs. Here is a list of the platforms showing interest in Bitcoin ETFs.
GrayScale is Interested
The Grayscale network is vastly interested in the Bitcoin ETF business. This network is the highest bitcoin holder today, with over 650 thousand BTC. The platform currently runs a Bitcoin trust called GBTC. Grayscale expressed their interest in changing the GBTC trust to an EFT soon.
VanEck is among the 12 institutions to apply for the Bitcoin futures EFT in the US. This network has been making applications, with its first one in 2019. SEC rejected that first application, and in late December 2020, VanEck made its second attempt. Recently, in August, VanEck applied again for a Bitcoin ETF. VanEck also filed for Ethereum ETFs four months ago.
Global X made its first application for a Bitcoin ETF to the SEC in mid to late July 2021. This network is famous for its many ETFs, running to over $31 billion in asset management. The Global X network plans to invest 80% of its assets in the Bitcoin ETFs and other similar investments.
Proshares made its first application for two bitcoin ETFs in 2017. However, soon after, they withdrew their applications. In late July, Proshares launched a Bitcoin futures mutual fund to gain BTC exposure. Later in August, Proshares reapplied for the Bitcoin ETF. If the platform gets the chance to be the first futures ETF, it will create further exposure.
This year, Galaxy digital has been very active in applying for bitcoin ETFs. Galaxy made the first attempt this year in April. However, like many others, soon after the SEC news, the institution reapplied. This platform is vast, with over $40 billion of assets in custody. Like the others, it aims to bring BTC exposure to users.
Valkyrie Investments is another institution interested in bitcoin ETFs. Currently, Valkyrie investments run different trusts, including bitcoin, Polkadot, Algorand, and dash trusts. The platform also applied for the Bitcoin 2.96% futures ETF to help risk hedging and BTC exposure.
Invesco Capital Management
Others Applied Before August
Other platforms made applications for BTC ETF before August. However, some of them did not reapply in August after the SEC’s recent announcement. Among those platforms include;
- 21 Shares
- One River Digital Asset Management
- Teucrium trading
- Krypton investment advisor
- FD Funds Management
- First Trust Advisor
- Wisdom Tree Digital Commodity Services
- NYDIG Asset Management
So, Who is Winning This Race?
Now, the question of who is winning this race remains. Since there are over 15 active bitcoin ETFs, it’s clear that one or a few could get the first chance. Generally, both platforms have significant chances of becoming ETF pioneers in the US.
There is one large institution, Grayscale Bitcoin Trust, which could have a bigger chance of winning. This platform is yet to apply. If Grayscale applies, they will have a bigger opportunity than most of the other applicants. Grayscale has over 650 thousand BTC in assets. It’s the most extensive network on this list.
However, it’s also possible that the SEC will approve multiple projects at once. If that happens, all projects on this list will have an equal chance of succeeding in the markets. However, the likes of VanEck, Proshares, Galaxy Digital, Global X, Valkyrie, and Invesco will have a better chance than the rest.
The race for launching bitcoin ETFs is now tighter than ever before. Over 15 platforms submitted applications for the ETFs, and all of them are currently under review. Others decided to resubmit and revise their proposal after the recent SEC chair announcement.
As to who will win this race, it’s not clear. However, there is an immense possibility that Grayscale, one of the largest bitcoin trust managers, will be among the top. It’s also possible that the SEC can choose multiple networks as pioneers of the Bitcoin ETFs.