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00:00Break the forty seven thousand. We've obviously been in a range for basically the duration of this year. What is your assumptions about the trajectory as we move forward through 2022. Well it's been a choppy start to the year not just for crypto but across all asset classes. So I think certainly it's an exciting morning in the crypto community to see that year long so far of losses erased and also seeing Bitcoin break out above that psychological forty five thousand dollar level. I think what we're seeing is a couple of needed crypto buyers like Tara buying for their own reserves as well as now we're actually seeing in the track five space in the CMB futures all time open interest on that side as well which is leading to a little bit of a short squeeze in the futures and thus the Bitcoin prices this morning. Michael there was a lot of talk about the fact that institutions were going to be stepping into this market in a big way. What are you seeing through institutions. Which ones are stepping up. Which ones on. What's really encouraging to see from RTS is really some of the traditional players beginning to get into crypto trading. Some new firms like COWAN and others have begun trading crypto and offering crypto custody services as well. And on the investor side you know there's no question amongst investors that crypto is an asset class is here to stay. So all of the firms that they work with for advisory or for custodianship they're all beginning to offer crypto products and services. And that's also leading to greater adoption as well as investor appetite to diversify into the asset class. Well and speaking of how investors can get into this asset class and you were talking about bitcoin futures earlier. There obviously is an ETF for that. Well there is not yet is a spot ETF and that is obviously something that grayscale has been actively pursuing. You've asked people to write into the S.E.C.. What do you expect the consequence of those letters to be and ultimately how this is going to end up when it comes to S.E.C. approval. Well the grayscale team has been putting the full resources of our firm behind converting BTC our flagship fund into an ETF. It's really important that investors know that we have and will continue to advocate for them but their voice can actually be heard through this process as well. And so the S.E.C. has opened up this comment period for investors to advocate why they want an ETF wilder offer greater protections. And this is really really important part of the process. GTC today is owned by investors in all 50 states and there's actually now over 800000 accounts in the US all waiting patiently to have it convert into an ETF. Michael what do you think Gary Gensler actually wants here. What is his objective in terms of what happens next with you with the market. Do you think he needs or wants control of the underlying market before he's willing to take the step of giving you guys that option. Well the S.E.C. has certainly encouraged a lot of crypto participants including crypto exchanges to come in and register with them. And Gary and the current S.E.C. administration has moved the ball forward. It was really a very exciting announcement that we now have Bitcoin futures ETF is out in the market. But unfortunately that's forced investors into those Bitcoin futures products because those are the only ones that exist. And so we're really encouraged by that as well as the recent executive order that's causing more federal agencies to focus on crypto. And ultimately we believe it's a matter of when not a matter of if a spot bitcoin ETF is approved. If it is not if it is denied. Would you look at the option of an EPA lawsuit. I think all options are on the table. I think certainly it's important that between now and the end of that 240 day process which ends in early July that the FCC hears from as many investors as possible as well as academics policy makers. Everybody has an opportunity to weigh in on this issue. And all of that is in fact considered as the FCC weighs the issue in front of them in terms of the most likely routes to get to an ETF being approved. What does it look like. What do you think the most obvious trajectory that the world right now what is what do you think is the most likely outcome here. If you were to pick an outcome of how you get from where you are now to that ETF being approved what does it look like. Well Guy GTC today has been treated since 2015 and it's been an S.E.C. reporting company since January of 2020. So every single day that it is trading and being bought and sold by investors and is not being folded into the familiarity and the protections of the ETF wrapper we really don't feel that the S.E.C. is doing everything they can to actually protect investors. What's missing is those last two key components that we're seeking from the S.E.C. GTC could move up to a national exchange like the New York Stock Exchange and then could also have that simultaneous creation and redemption process that would keep the shares trading in line with its net asset value. Well on the subject of BTC it has treated at a 25 to 30 percent discount for the entire month of March. And you're late going Horizon Ze Cash Trust. Also we're trading at sizable discounts. Has that influenced demand at all. Well I think what's so exciting about the opportunity around this for investors is that when they think about putting on crypto exposure they can take a dollar and put it into the spot market or they can take a dollar and put it into BTC and buy Bitcoin exposure at about 75 cents on the dollar. And so investors understand that over time if and when BTC converts that will converge and that discount will actually close up to the net asset value. So for most investors there's a tradeoff there. And those that have that longer term time horizon for their bitcoin exposure actually see it as a really big and exciting potential for them in terms of the discount that there currently exists. Is that an opportunity for you. You basically are trading at a discount to the underlying asset. How how do you take advantage of that Michael in some shape or form. Well it's an opportunity for investors. As I mentioned if you have a long enough time horizon you have conviction that the S.E.C. will approve BTC and other spot Bitcoin ETF applications. Then you do have the ability to buy Bitcoin exposure at a discount to the prevailing market. And you've seen that be the case where BTC is held inside mutual funds inside ETF inside retirement accounts and today is owned by institutional and retail investors like.

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Grayscale May Explore Options If SEC Rejects ETF Request

Grayscale Investments CEO Michael Sonnenshein discusses the outlook for crypto and its oversight with Kailey Leinz and Guy Johnson on "Bloomberg Markets." (Source: Bloomberg)

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