On July 12, Grayscale CEO Michael Sonnenshein told CNBC that traditional finance companies creating Bitcoin ETFs are a moment of validation for crypto. 

Crypto ETFs Validate Asset Class

Sonnenshein explained that the “ETF wrapper” is a tried and tested investment vehicle. He added that it had been the access point for so many different assets. 

“Bitcoin is an asset that is not going away and investors want access to it,” 

He stated that BlackRock’s ETF application serves as a “moment of validation.” He then added, “Grayscale has weathered its third crypto winter, demonstrating the resilience of the crypto industry."

Moreover, he said that moving to an ETF structure will give investors the additional protection they want and need. 

He stated that BlackRock’s ETF application serves as a “moment of validation.” He then added, “Grayscale has weathered its third crypto winter, demonstrating the resilience of the crypto industry.”

“Literally the largest asset manager in the world publicly committing to advancing their crypto efforts only lends to the validity of the asset class and the staying power that it has.”

Last week, BlackRock CEO Larry Fink echoed the sentiment stating that its Bitcoin spot ETF will ‘democratize’ crypto. 

However, many industry observers have warned that traditional finance is trying to take control of the sector. This is being done with help from the SEC, which is crushing smaller businesses. 

When questioned about volatility and huge market drawdowns, he said that most traders view crypto as a long-term part of their portfolios. 

Sonnenshein also said that if Grayscale could convert its GBTC fund to an exchange-traded fund, it would unlock billions of dollars of investor capital.

Nothing Set In Stone Just Yet

However, the move is currently being blocked by the Securities and Exchange Commission. The regulator was described as a “turtle with a procrastination problem,” on CNBC.  

Grayscale has sued the SEC over its refusal to even entertain the concept of converting the fund. Earlier this week, a lawyer for the firm sent a letter to a US Circuit Court, challenging regulators’ ETF refusal.

The firm’s flagship fund, GBTC, has been trading at a massive discount amid the recent market turmoil.

However, the recent slew of ETF filings has decreased that discount from almost 50% in December to around -28% today, according to Coinglass. 

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