Grayscale CEO, Michael Sonnenshein, recently stated that the recent approval of the inverse Bitcoin ETF is a sign that Bitcoin had matured as an asset. Sonnenshein took to Twitter to explain his feelings on the approval of the short BTC ETF in the US.
The Inverse BTC ETF Good for the Industry
According to the CEO, the approval of new BTC-related products by the US SEC represents that the regulator is gradually accepting crypto. While tweeting about the ETF approval, he emphasized that he was not offering investment advice. He also stated that he was not “calling the bottom,” and Grayscale did have any plans to short crypto.
However, the Grayscale CEO remains critical of the SEC for rejecting every attempt to launch a spot-based BTC ETF. In his opinion, approval of a BTC spot ETF would be the logical next step. According to him, the BTC price discovery was supported not just by a healthy two-sided market, which underpins multiple long products, “but also a derivatives market robust enough to offer short exposure to retail investors.”
Grayscale is currently working to convince the SEC to convert its flagship fund into an ETF. In a previous filing, Grayscale had stated that converting its GBTC trust into an ETF would broaden access to Bitcoin while enhancing protections. Grayscale had added that it would unlock $8 billion in value for investors. According to its SEC filing, this figure was because the trust had been trading at a 25% average discount, which should disappear upon conversion.
About the Inverse Bitcoin ETF
ON June 21, 2022, ProShares launched the first short Bitcoin ETF in the US. The ETF allows investors to gain exposure to the inverse performance of Bitcoin. Essentially, if they invest in the ETF, they could potentially benefit from the continued decline in the prices of BTC. Additionally, investors could use the ETF to hedge their crypto exposure using the convenience of an ETF. The ETF, called BITI, is designed to address the challenge of acquiring short exposure to BTC, which can be challenging and expensive for most investors.
ProShares was the same company that launched the Bitcoin Strategy ETF (BITO) in October 2021, which was the first Bitcoin ETF in the US. At the time, it attracted over $1 billion in assets in just two days, making it the most successful launch in the history of the ETF sector. Its launch signaled regulator acceptance of BTC, and it sparked off the second phase of the 2021 crypto Bull Run.
Impact of BTC Price
On Saturday, June 18, 2022, the price of BTC crashed to its lowest level this year at $17,500. However, it managed to experience a modest comeback on Tuesday, June 21, 2022, when it climbed to $21,708.
Despite this recovery, most analysts believe the recent spike is a fluke. The NYSE Group president recently stated that the price of BTC might end up bottoming at $17,000. If that happens, the crypto industry might begin its recovery by the end of July 2022.
