- “Despite the crazy premium on GBTC, denial is all but certain,” of the Wilshire Phoenix Bitcoin ETF on Feb. 26 – Jake Chervinsky, General Counsel at Compound Finance
Just like 2018 and 2019, 2020 is looking like a no Bitcoin ETF year.
Although, the final deadline for the approval and denial of the Wilshire Phoenix Bitcoin ETF, the last bitcoin-related exchange-traded fund filed, is next week on Wednesday, Feb. 26, it is expected to be a no go from the US Securities and Exchange Commission (SEC).
Jake Chervinsky, General Counsel at Compound Finance says,
The SEC's final deadline to approve or deny the Wilshire Phoenix bitcoin ETF is next Wednesday, February 26.
Despite the crazy premium on GBTC, denial is all but certain.
This is the only bitcoin ETF proposal pending, as Bitwise & VanEck take a break. I'd guess no ETF in 2020. https://t.co/oiAukjioBo
— Jake Chervinsky (@jchervinsky) February 19, 2020
The Denials and Withdrawals
In December, SEC postponed the decision on the bitcoin ETF and US Treasury bond ETF proposal filed by Wilshire Phoenix that was first filed last summer.
The securities regulators have rejected a dozen such proposals in the past two years citing market manipulation and surveillance.
While the proposals by GraniteShares and Bitwise have been denied, Grayscale, VanEck, REX Shares, and First Trust have withdrawn their proposals. Winklevoss’ physical bitcoin ETF has been rejected twice, Direxion and ProShares had one of their proposals rejected and one withdrawn. The combined proposal from the VanEck and SolidX was also withdrawn.
Kryptoin Bitcoin ETF Trust was another one in line but they never published in the Federal Register because as Chervinksy noted, “their S-1 delayed its effective date until further amendment,” as such there's no active deadline.
And as crypto exchange Kraken noted in its latest report, “Bitcoin ETF approval odds in the US remain low (<10%) in 2020, given concerns over the level of regulatory oversight.”
Meanwhile, Crazy Premium on GBTC
“Despite the crazy premium on GBTC, denial is all but certain,” further stated Chervinsky.
As we reported, Grayscale Bitcoin Trust (GBTC) has been trading at a hefty premium of 41% over Bitcoin’s market price.
While GBTC is trading at $13.1, with each share representing 0.1 BTC, Bitcoin is currently trading at around $9,585.
This high premium shows demand for Bitcoin among institutional investors, especially millennials as was revealed by Charles Schwab’s holdings' analysis.
Many argue that in the absence of an ETF, institutional investors can take advantage of this premium to profit at the expense of retail investors. However, as competition rises and new more alternatives make an entry and become popular and regulatory changes are made, this premium would be pushed down.