The Robinhood financial platform has made available to users cryptocurrency investment products from Grayscale.
Robinhood announced that it has registered two investment products Bitcoin Trust (GBTC) and Ethereum Trust (ETHE). Robinhood customers can now access Bitcoin and Ethereum-based cryptocurrency investment products without actually owning digital currencies.
Investment company Grayscale takes care of the storage of these products in exchange for a commission, and buyers receive a “share in bitcoins or ethers.”
The founder and CEO of Digital Currency Group (DCG), the parent company of Grayscale Investments, Barry Silbert released a happy announcement of GBTC and ETHE:
“Finally! You can now trade Grayscale Bitcoin Trust and Grayscale Ethereum Trust on Robinhood.”
But while both GBTC and ETHE are considered pegged to the price of the underlying cryptocurrencies, they rarely trade 1:1 against BTC and ETH. One of the reasons for the difference in price brokers call “long periods of asset holding.” When large holders eventually dispose of an asset, this can affect the price on the open market.
If the U.S. Securities and Exchange Commission (SEC) accepts Grayscale’s proposal to convert the bitcoin trust into a bitcoin exchange-traded fund (ETF), the discount is likely to disappear, as the structure of the ETF allows units of such a fund to be traded much closer to the price of the underlying asset.
The regulator has not yet approved bitcoin spot ETFs, which are investment contracts based on the expected future price of bitcoin.
Grayscale management recently announced that amid the expansion of the digital asset market and the resistance of the SEC to create an ETF, it is considering the possibility of offering its services to European crypto investors.
