Mike Novogratz, CEO of Galaxy Digital, a US cryptocurrency asset manager, hopes to launch a bitcoin ETF, and says the SEC “didn’t protect consumers” by allowing GBTC instead of a true ETF. This was reported by Decrypt on the 8th (local time).
Galaxy Digital is one of several financial companies aiming to launch a Bitcoin ETF in the US. However, long-time cryptocurrency investor Mike Novogratz expressed concern over how the U.S. Securities and Exchange Commission (SEC), who will approve the ETF, has handled the situation so far.
In a discussion with New York magazine Jen Wieczner at the ‘2021 Ethereal Summit’, Novograz said that the Grayscale Bitcoin Investment Trust (GBTC), which allows investors to buy stocks in funds that hold large amounts of cryptocurrency, does not have a true Bitcoin ETF. It was argued that it was a bad deal for consumers in the situation.
“The regulator’s job is to protect consumers,” Novogratz said, “I don’t think they did it well in the Trump administration.” “Look at Grayscale Investment Trust. It was a great business for Grayscale. However, early consumers bought bitcoins at a premium of 20-30% as a closed fund by a hedge fund. ETFs would have been a much more luxurious solution. The SEC will get a low score for this,” he added.
Bitcoin ETF is a publicly traded investment vehicle that tracks the price of cryptocurrencies, allowing investors to gain exposure to Bitcoin without actually buying and storing Bitcoin.
At least eight companies, including Galaxy Digital, have applied to operate the Bitcoin ETF. Tyler and Cameron Winkleboss, co-founders of the cryptocurrency exchange Gemini, first applied for the Winklevoss Bitcoin Trust in 2013, but were not approved. Canada, like Brazil, has several active Bitcoin ETFs, but the SEC has yet to approve a single US fund.
The Grayscale Bitcoin Trust (investment trust) was evaluated as a smart investment by some as the price of bitcoin surged last year. However, as the price rise of bitcoin leveled recently, some famous investors were angry, and buyers traded at a discounted price of GBTC (minus premium // -15.92% based on 7 days (local time)) while receiving grayscale administrative fees. Has become. Grayscale recently announced that it is “100% effort” to convert the fund to a Bitcoin ETF, but for now it is suggesting that Novograz is a dry alternative to real trading.
Novogratz said of GBTC that “SEC allowed a single product that consumers thought was not good.”
“For a while, consumers have done it well, and Barry Silvert is gaining a lot of credit because it came up with a product that gives people the first access to bitcoin. right? We all give him a lot of applause and thanks. Because he brought people to the tent. But if I were the SEC, I would have said,’If you want to bring people to a tent, bring people to a safer tent.’”
Novograz is looking more optimistic about the future of the SEC in the biden administration’s SEC chairman, Gary Gensler. Gensler is seen as a cryptocurrency-savvy chairman, if not crypto-friendly, and Novograz sees his SEC will provide the necessary regulations to attract more institutional investors into the cryptocurrency industry.
“Gary Gensler will be very good for our ecosystem. He is a very smart and practical person who understands this space. It will be regulated, but it will be wisely regulated.”
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Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.