2022 is the first date we have seen a bitcoin ETF: Greg King

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Greg King, CEO of Osprey Funds, joins Yahoo Finance Jared Blikre and Seana Smith to discuss Treasury Secretary Janet Yellens’ statements on crypto and stablecoins, and why bitcoin continues to see a sell off in the markets.

Video transcript

JARED BLIKRE: Welcome to Yahoo Finance Live. I am Jared Blikre. It’s not just stocks that are selling today, but Bitcoin and crypto in general as well. I’m looking at Bitcoin, down around 3% now. We’re going to talk about why exactly, or potentially, what’s going to happen, with Osprey Funds CEO Greg King. Thank you for joining us here.

We just had a discussion with the previous guest on some of the key levels here. How do you see all of this? Because we have some of our … well, let’s face it. They’re called the Plunge Protection Team, the president’s market task force. They’re sort of talking about stable coins here. Is it a risk for the other coins here like Bitcoin and also Ethereum?

GREG KING: Yeah, I think all of this chatter isn’t particularly useful for Bitcoin or Ethereum. Obviously, the massive sell-off in the market today is also not helping. However, we take a long-term view. Bitcoin is here to stay. Breakthroughs and access ramps to investment are being built. Interest from institutional investors is very strong. And we’re seeing some activity among the Bitcoin whales that they’re starting to re-accumulate at around $ 30,000.

So, you know, that’s one of the things with investing in crypto, is managing the drawdowns, resizing that wallet. So this is something investors should be aware of in terms of their own risk tolerance. But it could be an opportunity to make an investment that will pay off in the long run.

SEANA SMITH: So Greg, you don’t feel like the recent volatility that we’ve seen, the fact that we’re now trading around 30,000, that scares the interest that we might see in institutional investing. . You say that interest is still there, and that it is still quite healthy?

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GREG KING: Yeah, we think so. I think the institutions are taking their time. And some – we’ve seen really big notoriety, say, some CEOs of some electric cars – electric car makers talk about Bitcoin in their strategies. There are many others who are not so obvious about what is going on. And I think you’ll see continued institutional interest.

Bitcoin has established itself, in my opinion, as a substitute, a potential substitute, for gold or real investments, hard investments like gold, which can help diversify a portfolio, as your said previous guest. So we don’t see that changing, although volatility can sometimes hurt your stomach.

JARED BLIKRE: Yeah, a lot of volatility here. I want to tell you about the landscape of a Bitcoin ETF in the United States. Everyone has been looking forward to it for about three or four years now. Looks like Gary Gensler doesn’t really want to get out of this yet. I know you have an ETN, low cost compared to some of your competition. Where are we in the approval process? And when do you think this will happen?

GREG KING: Yeah, just to be clear, we actually have some confidence. It is a Bitcoin Trust that holds the custody of the assets with Fidelity Digital. And it is the cheapest supplier. The ticker is OBTC. Here is what we think. There was a lot of hype at the start of the year around the new administration with the arrival of Gary Gensler. You’ve seen a flurry of deposits, from established companies to sort of newcomers, pursuing this Bitcoin ETF idea.

This is something that we have actually been involved in for a long time. Parent company Osprey filed for a Bitcoin ETF in 2017, so we’ve been in dialogue with SEC staff since then. And if a Bitcoin ETF goes through the Gensler administration, I think that won’t happen this year. I think there is so much on their plate, it’s going to take them a while to assess the situation.

There has also been a sort of body of language and rhetoric and points that have been raised by staff with previous requests that need to be addressed. And so it’s not a slam dunk. And I think the market is calibrating in part because I think that was part of the surge earlier in the year to 64,000, where you saw so many filers for a Bitcoin ETF.

It almost seemed like a given to a lot of people. And I think there’s a bit of a hangover effect there, where people maybe realize that maybe it’s not quite around the corner. But we hope it will eventually happen. I would just say 2022 is probably the first date we could see this.

SEANA SMITH: OK, yeah, I was going to ask you what a more realistic timeline was for this. So, going from there, Greg, I guess, what would you say, this is how critical it is for the United States to lead the way in crypto regulations, just in terms of establishment of the United States as one of the major players and one of the leaders in this space?

GREG KING: Well, unfortunately I don’t think they led, at least in our part of ecosystem asset management. You have seen Bitcoin ETFs approved in Canada, Europe and elsewhere. And the United States is definitely behind. I think it’s obviously by choice. I think they’re thinking about it, if I had to guess, in a more holistic way, beyond just whether or not a Bitcoin ETF makes sense at this point, but really, more in the sense of what precedent let’s go. – we create when we approve one, and what does that mean in regards to an Ethereum ETF or et cetera, et cetera, et cetera.

This is partly why we are focused on building our product line into the ecosystem beyond Bitcoin. We’re big fans of Bitcoin, but investing in crypto is about more than Bitcoin. In fact, Bitcoin is less than 50% of the market capitalization these days. So it continues to build behind the scenes because at the end of the day, it’s really just a technology investment. But the headlines are still on the Bitcoin ETF and the price of Bitcoin. And we understand this because it is the most widely used cryptocurrency.

JARED BLIKRE: Yes, and that’s a shame because most retail investors in the United States just don’t have access to a fund. Greg King of Osprey Funds, CEO, thank you for visiting.

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