Grayscale brings GFOF to Europe
Grayscale, manager of the world’s largest bitcoin trust, is entering the European ETF market in partnership with white-labeller HANetf.
The Grayscale Future of Finance UCITS ETF (GFOF), which is listed in London and Paris, offers a European version of its US fund of the same name and ticker.
GFOF tracks the Bloomberg Grayscale Future of Finance index. The index is made up of companies from developed markets that support crypto. It focusses on bitcoin miners and payments companies that move crypto around.
The fund is market weighted and charges 0.70%.
Bernie’s commentary – the niche is crowded
I must admit to being a bit confused by this launch. GFOF in the US, where it was launched in January, currently has just $8.4 million in assets under management. While I freely concede that the past five months have been as rough for crypto ETFs trying to raise money, I’d have thought the logical thing to do is prove the concept can work in the US, and only then come to Europe.
The other reason for puzzlement is that HANetf, with whom Grayscale is partnering, already has a similar ETF to this. The ETC Group Digital Assets and Blockchain Equity UCITS ETF (KOIN), which launched in November last year, has more than 50% portfolio overlap with GFOF. There are some differences – GFOF is a bit narrower in its focus, with 21 holdings compared with KOIN’s 31 – but they have more in common than apart. KOIN is also 10 basis points cheaper.
On the upside I guess, Grayscale clearly sees the future with ETFs. The very second Purpose launched its bitcoin ETF in Canada, Grayscale’s closed ended bitcoin trust had its premium permanently wiped out. (The discount is currently -31%, making a capital raise impossible). Grayscale is now threatening to sue the SEC if it rejects its application to turn its closed ended trust into an ETF. But judging by the discount, the market is unconvinced the closed ended trust will ever become an ETF.