Nate Geraci is the President of The ETF Store, an investment advisory firm. He is also recognized for hosting the “ETF Prime” podcast, where he discusses various topics related to exchange-traded funds (ETFs). Geraci’s expertise in ETFs has made him a notable figure in the investment community, particularly for those interested in the growing ETF market. He often provides insights on ETF trends, investment strategies, and market analysis.
On 7 January 2024, Geraci shared on social media platform X an in-depth thread about the spot Bitcoin ETFs that are widely expected to get approved by the U.S. SEC this week. He outlined five key elements he’s monitoring regarding the imminent launch of these ETFs.
1) Fee Disclosures and Competition
Geraci emphasizes the crucial role of fee structures in the competition among spot Bitcoin ETF providers. He notes that Fidelity currently leads with a fee of 0.39%, while Invesco is at 0.59%, albeit waiving its fee for the first six months. The focus is on remaining fee disclosures, particularly from major players like BlackRock and Grayscale, as fees are a critical factor in the competitiveness of these ETFs.
2) SEC’s Approval Vote
The expected SEC approval vote, likely on Wednesday, is a pivotal moment. Geraci explains that the SEC Division of Trading & Markets must approve 19b-4s (exchange rule changes), and the Division of Corporate Finance must sign off on S-1s (registration statements). He anticipates the key 19b-4 approval orders to be issued, paving the way for the spot ETFs.
3) Potential ETF Launch and Investor Capital
Geraci expresses curiosity about the type of investor capital lined up for the potential launch of these spot ETFs, possibly as soon as Thursday. He references rumors about BlackRock entering with $2 billion and speculates on what Fidelity, Invesco, and others might bring. There’s also talk of ARK potentially buying over $200 million to replace GBTC in their ARKW fund.
4) GBTC’s Conversion and Uplisting
A significant aspect is whether Grayscale Bitcoin Trust (GBTC) will convert and uplist on the same day as the other spot ETF launches. Geraci believes this is likely, based on executive tweets, filings, and general actions. GBTC’s conversion would be a major advantage, as it currently holds $27 billion in assets, instantly placing it among the top 60 ETFs by AUM upon launch.
5) Marketing Strategies
With the launch of spot Bitcoin ETFs in the U.S., Geraci anticipates a marketing blitz from various players, including Bitwise, Hashdex, VanEck, BlackRock, Fidelity, Invesco, ARK, and Grayscale. He notes that the advertising rules for ’33 Act (spot Bitcoin ETF structure) are more restrictive, expecting to see creative marketing approaches.
James Seyffart, a prominent ETF Research Analyst at Bloomberg Intelligence, responded to Geraci’s thread, agreeing with the analysis. Seyffart finds the fee war the most intriguing aspect, though he notes that this could change if Grayscale faces any setbacks. His base case, however, is that Grayscale will not encounter such issues.
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