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In this episode of Bitcoin Magazine’s "Fed Watch" podcast, hosts Christian Keroles and Ansel Lindner spoke with Elliot Johnson of Evolve ETFs.
Johnson and Evolve launched a bitcoin ETF in Canada in February and the episode covered that experience. Evolve has many ETF products centered around disruptive technologies and Johnson has a lot of experience launching products like these and working with regulators on financial products, so the hosts took the opportunity to dive deeply into this area of his expertise and get his view on bitcoin and the macroeconomic climate in general. As you can tell, it ended up being a pretty broad conversation.
It was nice for Keroles and Lindner to interview an industry professional who is, perhaps we can say, tangential to bitcoin. While Evolve is not technically a bitcoin-only company, it has several ETF products in the space. Johnson explained how its bitcoin ETF was the first product it tried to launch back in 2017, but regulators weren’t ready for it back then. Evolve kept trying and now has introduced one of the three bitcoin ETFs that were launched in Canada in the last month.
Johnson said that, though the process took several years, Canada is emerging as a forward-thinking financial jurisdiction. They are very comfortable with disruptive new products, and he hopes to maintain the good working relationship with the Ontario Securities Commission in the future.
Next, the hosts brought the conversation back to the U.S. and dove deeply into Johnson's view on Grayscale’s Bitcoin Trust (GBTC) and its current discount. He chalked it up to the opening up of competition in the space. This is a convincing argument, because the month prior to Canada’s three major bitcoin ETFs launching, the premium on GBTC was 40 percent. Today, it sits at -10 percent. Johnson also, obviously, leans toward the ETF structure as being superior to the trust-based structure of GBTC. Open-ended ETFs will remain closer to net asset value (NAV) of the underlying asset than a close-ended trust can.
The hosts also got into Johnson's macro vision of what’s going on right now and where bitcoin fits. He is quite keen on bitcoin as digital gold, fulfilling a large need for an alternate storage asset. When asked about where he sees the industry going in the next five to ten years, Johnson focused on the growing respect of the asset class. He also made an interesting point, that in his daily interactions with interested investors of this bitcoin ETF, they tend to be those who do not own bitcoin in any other capacity already. It is not current holders looking to diversify, but it is all new investor demand.
Lastly, the hosts asked for his advice to new investors and his opinion on a healthy bitcoin allocation in a portfolio. Of course, he was very professional and suggested talking to your financial advisor, and he ended on the need for continued work on education in the space.