Gundlach Changes His Mind On Bitcoin As First North American Crypto ETF Launches

Gundlach Changes His Mind On Bitcoin As First North American Crypto ETF Launches

With both bitcoin and ethereum hitting new all time highs overnight, skeptics are getting steamrolled, and the latest to join the bullish bandwagon was none other than long-time gold bull and cryptoskeptic Jeffrey Gundlach, who said he has changed his mind on the metal and considers Bitcoin a better trade.

Gundlach tweeted he’d been a long-term gold bull and U.S. dollar bear, but has turned neutral on both six months ago. Instead, he now thinks that Bitcoin may well be “the stimulus asset,” referring to the cryptocurrency’s rally amid a tsunami of cash pumped into the financial system during the pandemic.

Gundlach is the latest convert to the crypto cause’s and another sign the Bitcoin investmen cause is winning over some of the most influential institutional money managers and possibly siphoning cash from the gold market. While in the past traders turned to the precious metal as a risk-off or reflation asset, over the past year, gold has barely budged following a sharp spike in the spring of 2020, and has been range-bound while gold ETFs have seen growing outflows.

And in other news, while the US is still waiting for regulators to approve the first bitcoin ETF, North America’s first Bitcoin ETF got off to a blazing start in its first day of trading, with over $145 million worth of transactions.

On Thursday, the first North American Bitcoin product that’s officially labeled an exchange-traded fund debuted Thursday in Toronto (Europe already has several crypto-tracking products that function like an ETF). The Purpose Bitcoin ETF invests directly in “physical/digital Bitcoin,” issuer Purpose Investments said in a statement.

And while the digital asset has already surged fivefold in the past year, it continues to rise as more and more investors allocate capital to it as it grabs more mainstream attention, especially after Tesla Inc.’s recent $1.5 billion purchase.

Bloomberg reports that it’s unclear how much of the activity in BTCC will result in inflows for the fund, but the trading volumes are well above an ETF’s typical first day in Canada, according to Bloomberg Intelligence analyst James Seyffart. Unlike such ETNs as the Grayscale Bitcoin Trust which until recently traded at massive premiums, ETF proponents argue that such a fund will trade without the premiums plaguing many current Bitcoin trusts in the U.S.

“There’s sizable untapped interest for a Bitcoin investment that has the benefits of an ETF,” said Todd Rosenbluth, CFRA Research’s director of ETF research, adding it’s unlikely the fund will trade at a significant premium-to-net-asset-value. “While most ETFs come to market globally with an educational hurdle to overcome, many investors are familiar with what is inside BTCC,” he noted.

It may not be too long before the US has its own bitcoin ETF: while the US currently has several active filings for a Bitcoin ETF, including the ones from VanEck Associates Corp. and Bitwise Asset Management, the price swings and allegations of industry manipulation have been cited by the SEC as hurdles to regulator approval. Still, with Bitcoin trading near all-time highs even without an ETF, and a change of leadership at the Securities and Exchange Commission, the first American Bitcoin ETF is just a matter of time.

Tyler Durden
Thu, 02/18/2021 – 15:19

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