Kate Rooney, Bitcoin, Kathy Wood discussed on CNBC's Fast Money
Welcome back to fast money. Bitcoin holding above the $61,000 mark is a market gears up for the launch of the first Bitcoin futures ETF tomorrow. So does this launch clear the way for more names to enter the field? Let's get to Kate Rooney. For more on that, hey, Kate. Hey, Melissa's ETF. Maybe the first to market, but it probably won't be the last. There are a group of similar futures based Bitcoin ETFs waiting in the wings and they could go live by the end of this year. Tomorrow's ETF debut is from pro shares it'll hold Bitcoin futures contracts on the CME and we have invesco with a similar application in the works van neck and Valkyrie as well. Those are all on the watch list. And while pro shares may have a slight advantage as the first mover may only be, but a couple of days or a couple of weeks. And that leaves those other names to compete on fees potentially or even things like brand awareness. The other big name to watch here, grayscale Bitcoin trust. It's the world's largest Bitcoin fund with about 3.5% of all global Bitcoin supply in that fund. It's been the main on ramp for investors like Kathy wood, for example, to get exposure to crypto. Grayscale, confirming today that it does plan to convert that fund to a spot ETF eventually and CEO Michael son and John telling squawk box this morning that he expects competitive pressure going forward and they stand ready to reduce fees. But one other big thing analysts have been watching, the grayscale discounting. It used to be a premium, but it's been trading at a discount and roughly 15% discount to the price of Bitcoin since earlier this year. That's been blamed on a 6 month lockup period of initial investments in that fund. Holders aren't able to redeem shares and react to bitcoins. Market price in real time. Sources have been telling me the traders in some cases are buying grayscale betting that that spread would collapse if it is approved as an ETF and they're using it as sort of a way to buy Bitcoin at a discount. Melissa, Kay, thank you, Kate Rooney. Karen, we actually have talked about this in the past that discount. I'm wondering what your thoughts on that seems like it would have to close. It would have to trade apart some point if it's going to be an ETF reflective of the price. Right. This is the kind of thing you and I talk about actually. The GBTC discount rate. I mean, in prior, in its prior life before there were other products, it actually had that premium when Bitcoin was in a frenzy and people would pay over, which never quite understood. But I don't know how easy it is going to be for them to convert. But at the discount here, it's practically as wide as it's been. I think 21 or two is what it's been. I think it was 18 today. So I don't know, you know, Kate mentioned maybe people buying that. Can you short the future against it and see if that spread narrows? That would seem to be a not super risky bet, but you'd have to it sounds like hang on to your GBTC for a while. I think this size of this discount is interesting. Yeah, Jeff? Yeah, I mean, I think that's something investors just need to pay attention to in terms of the tracking area associated with some of these things that aren't actually owning the cryptocurrency. I think that's super important. If you look at the past year, Bitcoin up over 300% grayscale up a little less than 200%. So there is going to be a massive difference when you're not actually holding Bitcoin. I think that's important. There'll be less of a difference in a futures ETF, for example, but still you're not owning Bitcoin, so I think that's important to know, and it's not going to track the spot price. Again, I think the Holy Grail is an ETF that invests directly in Bitcoin. I think this is a step in that direction, but we're not there yet. And the timing is uncertain. So in terms of the narrowing of that discount, the timing is uncertain there too. All right, coming up, short.