Bitcoin surged 2% starting shortly after 5AM London time on Feb 14. The initial indication is that news from corporations may be having an effect. This ranges from North America’s first Bitcoin Exchange Traded Fund launching in Canada on Feb. 11 to a Bloomberg report claiming that Morgan Stanley’s $150 billion arm Counterpoint Global is considering an entry into Bitcoin.
The Bitcoin news flow for the past several days has been serious – in a good way. On Feb. 8, the news broke that in January, Grayscale added Bitcoin to its Grayscale Bitcoin Trust an amount totaling 150% of the BTC mined during the month.
On Feb. 11, Grayscale tweeted a table showing its holdings. GBTC now holds over $30 billion in BTC under management. According to Bybt, Grayscale owns 653,830 BTC.
The Holy Grail – in Canada
Grayscale rose to prominence by offering a way for institutional investors to gain indirect exposure to BTC. Because GBTC and Grayscale’s altcoin offerings are not traded on a market, they are regulated differently from those that are.
However, American institutional investors interested in Bitcoin have been clamoring for an Exchange Traded Fund (ETF). A filing by Gemini Trust in 2017 was denied by the Securities and Exchange Commission because of the immaturity of the Bitcoin market. Unfortunately for professional traders, this was the first of many such denials by the SEC.
On Feb. 11, Purpose Bitcoin Fund launched in Canada. This fund is the first Bitcoin ETF in North America, and it trades on the Toronto exchange. Furthermore, Gemini Trust is the sub-trustee responsible for holdings outside of Canada.
Purpose Investments is the first, but the likelihood of the SEC continuing to deny ETFs in the US is unlikely. Valkyrie Fund filed for an ETF in January, 2021, and the pressure on the SEC to approve the fund is now greater. Such an OK would enable even more institutional investors to gain exposure to BTC.
Morgan Stanley – in Bitcoin
Bloomberg broke a story on Feb. 13 that, according to its sources, Morgan Stanley was considering an entry into the BTC market. The investing giant’s $150 billion dollar Counterpoint Global would take on the investment. However, the move requires both regulatory approval and an OK from its corporate parent. If Morgan Stanley puts its seal of approval on a Counterpoint Global entry, a $50,000 BTC is only the beginning.
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