Bitcoin (BTC-USD) smashed its previous all-time high of just under $65,000 on Wednesday — just a day after the launch of ProShares’ Bitcoin Strategy ETF (BITO) on Tuesday, Oct. 19. In light of these developments surrounding bitcoin, Grayscale CEO Michael Sonnenshein believes that investment in crypto shows no signs of stopping.
“Well, the asset class is here to stay, and investors have a general appreciation of that. Investing in crypto is now something thematic, right?” Sonnenshein said. “Investors have historically gained exposure to energy or health care or tech. Now crypto occupies a sleeve of that portfolio. So amongst that, as a theme for investors, there's never been a stronger desire to diversify.”
After bitcoin surpassed $64,000 on Wednesday, the first time since April, the flagship cryptocurrency has seemingly found support well above the $60,000 resistance level. Bitcoin is now positioned to continue its rally amid surging ETF trading volume.
Sonnenshein joined Yahoo Finance Live to discuss the first bitcoin futures ETF as well as the outlook for cryptocurrencies. Grayscale, a digital asset management company with over $52 billion in assets under management, provides market insight and investment exposure to the crypto space.
And with regulation still a looming issue for crypto markets, Sonnenshein said that the main concern for the SEC regarding cryptocurrencies over the past several years has been a matter of pricing.
“[The SEC has] expressed concerns about manipulation in the underlying bitcoin market price, whether or not there are significant regulated markets that they can surveil, right? These are the types of protections and tools that the SEC, as a regulator, is typically used to seeing,” Sonnenshein said.
If bitcoin futures do succeed in quelling the aforementioned pricing concerns of the SEC, Sonnenshein believes, it would “clear the way” for cryptocurrency futures-based products in the market. According to him, such a development may also suggest that the SEC is growing more “comfortable” with the underlying bitcoin spot market.
Grayscale crypto ETFs
Grayscale and the New York Stock Exchange filed to convert the world’s largest bitcoin fund, the Grayscale Bitcoin Trust (GBTC), into an ETF on Tuesday. The company also manages its Grayscale Ethereum Trust (ETHE), among other investment products.
According to Sonnenshein, Grayscale has been proactive in its efforts over the past several years in working with regulators and industry partners to facilitate the launch of a Grayscale bitcoin ETF.
“We've been waiting for our regulators to have the comfort they need to allow these products into the market,” Sonnenshein said. “And now that we believe they have the requisite comfort that they need, it's now time to not only open the door to futures-based bitcoin products, but also physically backed products.”
He also described the trend of emerging new products for investors to broaden and diversify their exposure in the crypto space as being one that shows “no signs of slowing down.”
“And so as we think about what investors want, clearly the success of GBTC has really shown that investors are looking for that exposure in a physically backed or spot-based product,” Sonnenshein said. “And we anticipate working, again, proactively with the SEC to make that conversion to an ETF and uplisting to the New York Stock Exchange.”
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV