Perspective: spot bitcoin uptake

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You also run the Franklin Bitcoin ETF I couldn’t do a show without mentioning Bitcoin folks you know that uh the symbol those of you want to know is easy BC Franklin was one of 10 actually it was 10 companies that fed a spot Bitcoin ETF uh nine of them were new uh

Grayscale was already existing uh tell us a little bit how that tracking Bitcoin um and we can chat for a moment on the other side yeah I mean Bob to your credit to ask about International ETFs when when Bitcoin is truly you know suck the

Oxygen out of the room I I I was it was nice to start that way um yeah I mean the last two to three months uh in terms of all the issuers uh building out the plumbing and the infrastructure to make sure that these uh spot Bitcoin ETFs did

What with they did what they were supposed to do um and here we are and so you know it’s we’re only maybe a week or two into their uh performance live in the market but the you know the million-dollar question was uh investors who like ETFs expect the ETF to track

Its underlying um uh asset and in this case it you know the funds own Bitcoins and the performance of the funds have been you know tracking the price of Bitcoin uh you know across the 10 they’re going to have different benchmarks so maybe the performance will be a little different between the two

But generally uh they’re all doing exactly what they were supposed to do in terms of tracking spot Bitcoin and Mike um one thing people were wondering about Bitcoin trades 247 but the ETFs don’t that doesn’t seem to been a major problem uh I’m wondering if you think so

And uh it looks like the the nine that are new got about $4 billion in inflows that seems respectable to me it it’s hard because I don’t have any benchmarks to compare but that seems fairly respectable number here any thoughts on that yeah I mean a couple thoughts one

On the structure side of things there’s no question that the ETF is a superior structure for somebody who wants to buy and hold um Bitcoin as an investment just like GLD is a superior structure to hold gold versus putting it in your safe at home if it’s a investment vehicle if

You’re holding it as a um speculative investment to um gain access to the asset class so that the ETF is doing it you got a bunch of smart people in a room creating an Arbitrage it’s going to work we could create an ETF of almost anything I sure hope we don’t but you

Could um you know as far as the the flows into the product I think it’s very respectful I the one question I have is you know what’s more where is there more demand is there more demand to get in to these new ETFs um or is there more

Demand to get out of gbtc which is the elephant in the room right it’s been locked up Bitcoin for a very very long time at depressed values at a discount and now it’s finally trading at par with the spot price of Bitcoin and so far

You’ve had 4 billion come into the new 9 ETFs we’ve had almost 2 billion come out of gbtc so net net it’s more money coming into Bitcoin right now but how does that play out over the long term I don’t know but it’s something to keep an

Eye on but but you know Dave or Mike uh it’s true there’s two billion came out but it was a 26 billion doll fund at grayscale it and they’re charging one and a half% Mike what you’re Dave you’re charging 0.19 is that right right now 0.19% 19 BS wave W difference 1.5%

Versus 0.19% is a big difference and yet to me um Mike it’s remarkable how sticky this money is you know you think that’s a that’s not nine basis points or three basis points that’s a lot and yet you know they seem to be relying on the idea

That the money is going to be fairly sticky and they so far I I think they they’re they’re right um yeah no I I there there’s going to be multiple types of money right now gbtc is a liquidity machine right so if you are a big institution looking for exposure to

Bitcoin for now you have have the same story that spies had for years right spy tracking the S&P 500 versus the cheaper Vanguard or I shares version liquidity matters when you’re trading at scale and trading in speed the question is though the difference is that’s six basis

Points when you’re talking about spy and the S&P 500 this is like 120 basis points this absolutely huge more than 120 basis points and I think that’s the question is how much of the money in gbtc is early money that the tax hit in a taxable account where the tax hit

Would be a yeah serious hindrance versus how much of it is I know a lot of folks that own gbtc in their qualified accounts right they’re all going to trade out of it why would they possibly pay that one and a half percent when they can pay 20 basis points to Franklin

Or one of the other issuers that’s just a no-brainer I just don’t I don’t think anybody has a clue what that makeup of that $26 billion do is and we’re all going to find out I think over the next six months to a year yeah so where does

Bitcoin and the ETFs go go from here we we had sibo on last week they were all excited about options potentially coming up they have the application in at the SEC hasn’t been approve but you guess where this is going to go so uh I’m I’m

Cuag to see anybody was going to work uh their Bitcoin ETFs into Target retirement and asset allocation funds Mike you you brought this up when I asked you about where it’s going is that ever going to happen I think it will happen it’ll be a differentiator for a

Lot of folks to say that we offer that um you know my personal views aside it it’s definitely easy vehicle to do it in uh model portfolios is the future firms such as there’s a lot of big issuers out there that have very large models so

They can feed these accounts um you know small allocation goes a long ways in terms of asset growth I do think you’ll see it whether that’s good good thing well that that remains to be seen But I do definitely think that the model game

Um a lot of ISS a lot of model providers whether it’s the issuers or strategists will start adding um and they’ll use it as a differentiator to the competition and yeah we’ll see how it plays out Dave I want I want to meet the people who

First go ahead and do that and uh put it in their model portfolios you know G gendler Gary gendler the SEC made it very clear that there are suitability issues here that are very real uh and uh reg best interest in interests so that would you not agree that’s a little bit

Of a barrier to have this suddenly Bitcoin ETF suddenly appear in model portfolios well that’s that’s the you know we’re we’re all watching these flows you know week in and a lot of the conversations with either asset allocators models a lot of the platforms

Is is a lot more uh hey let’s wait and see let’s see how these things are doing you know your question earlier on uh tracking we’re get we’re getting a lot of those types of questions as well and so uh there’s there’s a lot of research

Going on to say Hey what if we added 1% 2% or 3% uh Bitcoin ETF exposure to some asset allocation model how does that impact the volatility the sharp ratio um those are you know all that math is going on right now and um you know the

The early the Early feedback is I think there uh there could be a a place for for adding the ETF into into an Investor’s portfolio Okay uh well there you go you heard two different kind of opinions there uh I think it’s going to be a while folks before that happens but

We’ll see what an interesting conversation two very smart people as always here ETF Edge