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Tag: Grayscale Bitcoin Trust (BTC)

  • Grayscale CEO says most of the 11 approved bitcoin ETFs won't survive, defends highest fees in industry

    Grayscale CEO says most of the 11 approved bitcoin ETFs won't survive, defends highest fees in industry

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    Michael Sonnenshein at the 2022 Forbes Iconoclast Summit at New York Historical Society on Nov. 3, 2022.

    Arturo Holmes | Getty Images Entertainment | Getty Images

    DAVOS, Switzerland — Grayscale Investments CEO Michael Sonnenshein told CNBC that most of the approved bitcoin exchange-traded funds won’t survive, while defending the highest fees in the market for the company’s own product.

    The Grayscale Bitcoin Trust ETF is the world’s largest, with over $25 billion in assets under management.

    When the U.S. Securities and Exchange Commission approved a swathe of spot bitcoin ETFs earlier this month, much focus was on the management fees that firms from BlackRock to Fidelity were charging.

    Many of the ETF issuers were charging 0% fees for a limited amount of time before raising them slightly. Most of the approved ETFs have fees of between 0.2% and 0.4%.

    But the Grayscale Bitcoin Trust ETF charges a 1.5% fee.

    Sonnenshein laid out several reasons why it is charging that fee, including the fact it is the largest bitcoin fund, has a 10-year track record of “operating successfully” and has a diversified investor base.

    “Investors are weighing heavily things like liquidity and track record and who the actual issuer is behind the product. Grayscale is a crypto specialist. And it has really paved the way for a lot of these products coming through,” Sonnenshein told CNBC in an interview at the World Economic Forum in Davos on Thursday.

    Sonnenshein said the reason other ETFs have lower fees is that the products “don’t have a track record” and the issuers are trying to attract investors with fee incentives.

    “I think from our standpoint, it may at times call into question their long-term commitment to the asset class,” Sonnenshein said.

    The Grayscale CEO said two to three of the spot Bitcoin ETFs “will maybe obtain some kind of critical mass” of assets under management, but that the others may be pulled from the market.

    “I don’t ultimately think that the marketplace will have ultimately these 11 spot products we find ourselves having,” Sonnenshein said.

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  • CNBC Daily Open: Can't shake off stubborn inflation

    CNBC Daily Open: Can't shake off stubborn inflation

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    A customer shops for milk at a grocery store on December 12, 2023 in San Anselmo, California. 

    Justin Sullivan | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Price pressures persist
    An inflation report for December showed U.S. consumer prices     increased more than expected. CPI rose 0.3% in December, according to the Labor Department data, slightly more than expectations of a 0.2% rise. On an annual basis, CPI was up 3.4% year on year, also above a 3.2% rise predicted by economists polled by Dow Jones. The increase in prices was mainly driven by higher shelter costs. 

    Flat stocks
    U.S. stocks ended Thursday right around the flatline as the slightly hotter-than-expected inflation data kept any big moves at bay. Stocks in Asia fell as China’s annual exports dropped, but Japan’s Nikkei 225 bucked the trend to extend its record rally.

    Big China export drop
    Data from China showed annual exports falling for the first time in seven years in 2023. The country, however, saw higher-than-expected shipments in December. China exports fell 4.6% last year, its first annual drop since 2016, as demand for China made goods weakened amid a global economic slowdown.

    Bitcoin ETFs go!  
    Bitcoin exchange traded fund made its debut on U.S. exchanges on Thursday, tracking wild swings in the prices of the volatile cryptocurrency. There were about 11 ETFs that began trading after the U.S. Securities and Exchange Commission approved the recent rule change, including the Grayscale Bitcoin Trust and the iShares Bitcoin Trust which saw tens millions of shares exchange hands.

    [PRO] Goldman Sachs’ favorite Asian tech stocks
    Goldman Sachs highlights its top opportunities in the Asian tech hardware industry, on improving cyclical recovery, higher demand for artificial intelligence among other factors. Stocks favored include Taiwan Semiconductor Manufacturing Company and many more.  

    The bottom line

    Thursday was a historic day for cryptocurrencies but the broader theme for markets was the slightly hotter-than-expected inflation reading.

    Wall Street’s major indexes ended flat, with the Nasdaq Composite settling at 14,970.19, the Dow Jones Industrial Average eking out a 0.04% gain and the S&P 500 inching 0.07% lower.

    Following the the 3.4% annual rise, the road to the U.S. Federal Reserve’s 2% inflation target could be steeper than what many market participants and economists expected.

    It also shines the light on the gap between the Fed’s communique and market expectations for rate cuts, which are seen as early as March this year according to the CME FedWatch tool.

    “The ‘higher for longer’ party has received one more bullet in its banderole,” said Giuseppe Sette, president of AI-based market research firm Toggle AI said.

    “For the entire history of the Fed, rates have always been kept considerably above inflation in any scenario short of a recession. This CPI print pushes the first rate cut further away, possibly not even in 2024.”

    But bitcoin ETF trading quickly became an event that would give market players a reason to be excited about.

    This allowed regular investors to get a slice of the cryptocurrency pie and spurred hopes that bigger Wall Street institutional traders may also jump into the boat.

    Bitcoin, the world’s oldest and most popular cryptocurrency, had a volatile session on Thursday. The cryptocurrency jumped above $49,000, hitting its highest since December 2021 but that rally fizzled out by the end of the day.

    Bitcoin ETF also mirrored the choppy moves in the cryptocurrency.

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  • CNBC Daily Open: That sticky inflation

    CNBC Daily Open: That sticky inflation

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    Consumers shop for groceries at a retail chain store in Rosemead, California, on December 12, 2023. 

    Frederic J. Brown | AFP | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Price pressures persist
    An inflation report for December showed consumer prices     increased more than expected. CPI rose 0.3% in December, according to the Labor Department data, slightly more than expectations of a 0.2% rise. On an annual basis, CPI was up 3.4% year on year, also above a 3.2% rise predicted by economists polled by Dow Jones. The increase in prices was mainly driven by higher shelter costs. 

    Flat stocks
    U.S. stocks ended Thursday right around the flatline as the slightly hotter-than-expected inflation data kept any big moves at bay. Europe’s Stoxx 600 ended lower for the third straight day, with shares of Marks & Spencer falling to the bottom of the index after the British retailer flagged “near-term” challenges.

    Bitcoin ETFs go!  
    Bitcoin exchange traded fund made its debut on U.S. exchanges on Thursday, tracking wild swings in the prices of the volatile cryptocurrency. There were about 11 ETFs that began trading after the U.S. Securities and Exchange Commission approved the recent rule change, including the Grayscale Bitcoin Trust and the iShares Bitcoin Trust which saw tens millions of shares exchange hands.

    Tech layoffs   
    Investors on Thursday also witnessed a series of layoffs across technology companies. In a bet to focus on its “biggest product priorities,” Google parent Alphabet laid off several hundred employees. Discord, a popular messaging service used by gamers, also confirmed it will be slashing 17% of its workforce that tallies to about 170 jobs, while Amazon’s Audible division said it will cut about 5% of its broader workforce.

    [PRO] Impact of the new bitcoin ETF
    Analysts are already starting to predict what could happen next now that the long-awaited bitcoin ETFs have begun trading on U.S. exchanges. Hopes grow that the move could bring in the likes of old school institutional traders that have been on the sidelines.  

    The bottom line

    Thursday was a historic day for cryptocurrencies but the broader theme for markets was the slightly hotter-than-expected inflation reading.

    Wall Street’s major indexes ended flat, with the Nasdaq Composite settling at 14,970.19, the Dow Jones Industrial Average eking out a 0.04% gain and the S&P 500 inching 0.07% lower.

    Following the the 3.4% annual rise, the road to the U.S. Federal Reserve’s 2% inflation target could be steeper than what many market participants and economists expected.

    It also shines the light on the gap between the Fed’s communique and market expectations for rate cuts, which are seen as early as March this year according to the CME FedWatch tool.

    “The ‘higher for longer’ party has received one more bullet in its banderole,” said Giuseppe Sette, president of AI-based market research firm Toggle AI said.

    “For the entire history of the Fed, rates have always been kept considerably above inflation in any scenario short of a recession. This CPI print pushes the first rate cut further away, possibly not even in 2024.”

    But bitcoin ETF trading quickly became an event that would give market players a reason to be excited about.

    This allowed regular investors to get a slice of the cryptocurrency pie and spurred hopes that bigger Wall Street institutional traders may also jump into the boat.

    Bitcoin, the world’s oldest and most popular cryptocurrency, had a volatile session on Thursday. The cryptocurrency jumped above $49,000, hitting its highest since December 2021 but that rally fizzled out by the end of the day.

    Bitcoin ETF also mirrored the choppy moves in the cryptocurrency.

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  • Bitcoin rallies more than 6% as court sides with Grayscale over the SEC in crypto ETF case

    Bitcoin rallies more than 6% as court sides with Grayscale over the SEC in crypto ETF case

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    Jaap Arriens | NurPhoto | Getty Images

    The price of bitcoin surged Tuesday after the U.S. Court of Appeals for the DC Circuit ruled that the Securities and Exchange Commission was wrong to deny crypto investment giant Grayscale permission to convert its popular bitcoin trust into an ETF.

    Bitcoin jumped about 6.5% following the ruling to $27,683.82, according to Coin Metrics. The move lifted cryptocurrencies broadly as well as crypto equities higher.

    Stock Chart IconStock chart icon

    Bitcoin 1-day

    Grayscale’s lawsuit against the SEC has been closely watched by investors and other industry participants as a key catalyst that would shake up a market marred by low volatility and liquidity. Earlier this month bitcoin trading volatility fell to its lowest level in more than four years as investors had been waiting on the sidelines for more regulatory clarity on crypto activity – whether through new legislation out of Congress or through the ability to launch a spot bitcoin ETF.

    Several bitcoin futures ETFs have already been approved in the U.S.

    “The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP,” the court said in the ruling. “In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful. We therefore grant Grayscale’s petition for review and vacate the Commission’s order.”

    Many hope Tuesday’s ruling increases the chances that the SEC will approve other bitcoin ETF applications – including that of BlackRock, whose filing in late June drove one of bitcoin’s big rallies this year, as well as Fidelity, WisdomTree, VanEck and Invesco and others. A U.S. bitcoin ETF would provide a way to get exposure to bitcoin without having to hold it, which would invite retail and institutional investors as well as wealth managers into the market.

    The ruling also comes as a relief to many crypto market participants who have been frustrated by the SEC, particularly under Chair Gary Gensler, and its insistence on regulating by enforcement. The crypto industry has long sought out clarity in rules businesses can play by to establish and build long-lasting, compliant companies. The U.S. regulatory crackdown on crypto in 2023 — which includes and SEC enforcements and a lawsuit against the biggest U.S. crypto exchange — Coinbase, has been a dark cloud over the market.

    Grayscale initiated its lawsuit against the SEC in June 2022 after the agency rejected its application to turn its bitcoin trust, better known by its ticker GBTC, into an ETF. The company decided to pursue the ETF, which would be backed by bitcoin rather than bitcoin derivatives, after the SEC approved ProShares’ futures-based bitcoin ETF in October 2021.

    The ruling faced multiple delays but the SEC ultimately rejected the application last summer, citing failure by Grayscale to answer questions related to concerns about market manipulation and investor protections.

    The Grayscale Bitcoin Trust itself jumped 17%.

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