Question for Matt Hogan, CEO of BITW. Matt told us in his interview with Ric before SEC approved its spot Bitcoin ETF application, BITW will convert its Bitcoins options derivatives to its BITW net asset value. Its net asset values were about 37 percent. Will Matt follow his promise: converting the derivations option value to its net asset values?
This is not a promise you need to rely on Bitwise to fulfill. That’s because it’s an inherent aspect of how ETFs operate. BITW is a Grantor Trust, and these trade OTC; buyers and sellers set the price, and consequently the price could differ from the Net Asset Value of the fund. That is why the price is 37% less at the moment than the NAV. But when (if) the fund converts to ETF status, that discount will disappear – because all ETFs trade at NAV. The problem goes away – as we just saw with GBTC. It had a 50% discount last summer, but when it converted into an ETF last Thursday, that discount was gone.
Maybe you can share my e-mail on this subject to Matt Hogan who I respect but would appreciate sharing BITW is a grantor trust and its assets will be converted to its NAV instead of the discounted value after Thursday, 1-11-24, SEC approved its bitcoin spot ETF application.
There is no benefit to asking Bitwise. No answer they give you will be anything you can rely on legally. Besides, neither I nor they believe that BITW will ever become an ETF; it contains 8 coins that the SEC says it will not allow an ETF to hold.
That said, are you saying BITW cannot owned Bitcoins its owns after the SEC approval of its spot ETF at those Bitcoins NAV and the other 9 not yet approved digital assets at their option values which continue to be valued at buyer and seller created. Are you saying BITW cannot account for them like what I envision after SEC approval of its bitcoin ETF? To me, I can see the other 9 which the SEC has not yet approved will stay at their discounted prices bit Bitcoins which . SEC has approved will be stated or valued at its NAV. Are you saying Matt will not be able to do what I think possible for BITW’S digital assets?
If you’re referring to the fact that Grantor Trusts typically trade are premiums or discounts to NAV, then yes you are correct that is a material fact that investors need to know about. I have worked hard to provide that information, and have an article on it on my website. I know Bitwise discloses this as well.