Some companies will do anything to jump on the latest crypto craze. A few years ago, it was the blockchain craze. Companies, such as Riot Blockchain, changed their name just to jump on the trend. Yes, some pivoted their business plans, but nothing generated more immediate returns than the word "blockchain" itself.
Today is no different, but this time it's bitcoin. With the price blowing past the $60,000 level and Coinbase going public this past week, there may not have been as much light on the cryptocurrency space as there is today.
The good folks at ClearShares clearly thought so too.
I actually had to look this ETF up since I wasn't immediately familiar with it. The ClearShares Piton Intermediate Fixed Income ETF (formerly PIFI, now BTC) is an actively-managed bond ETF that invests in a portfolio of medium duration Treasuries, Agencies and investment-grade corporate bonds. It's a fairly unremarkable fund that has about $32 million in assets.
While bitcoin is often referred to in the media by BTC, the ticker, amazingly, hadn't been taken. ClearShares saw an opportunity and took it. Has the extra attention from investors searching for the price of BTC and coming across a bond ETF instead helped boost interest? Not really.
PIFI only traded about 1,000 shares a day on average, but traded more than 7,000 on the day before the ticker conversation. As I write this around midday on Friday, the total traded volume is only around 4,500 shares.
Is This A Bad Idea?
While ClearShares' motivation for grabbing the BTC ticker is pretty obvious, the broader question is whether or not this is a good idea or even an ethical idea.
I think it's just going to create a lot of confusion and, potentially, anger. People who punch BTC into their search bars aren't looking for a bond ETF. They're looking for bitcoin. How many people are going to come across the ClearShares bond ETF after typing in BTC and say "boy, I'm glad I stumbled across this fund". I'm guessing very few.
Now, before we go ahead and ostracize ClearShares for this move, there may actually be some logic behind it.
Bloomberg reported yesterday that Grayscale, the company behind the $41 billion Grayscale Bitcoin Trust (GBTC), has taken an ownership stake in ClearShares "as part of its long-term commitment to bring digital currency ETFs to market, with the potential to collaborate on products with investment strategies related to the digital currency industry,” according to the article.
If true, which I have no reason to believe that it isn't, this starts to make some sense. Grayscale has already stated its intention to convert GBTC over to an ETF once bitcoin ETFs get approval from the SEC. Taking a stake in ClearShares could give the company the ETF infrastructure it needs instead of building it out itself. Grabbing the BTC ticker now would give Grayscale the clear advantage if multiple products end up getting introduced altogether. I wouldn't be surprised if the BTC ETF pivots at some point from being a bond ETF to being a bitcoin ETF so that the ticker aligns with the underlying product.
Given that there are already 8 (for now at least) bitcoin ETF filings in the works, Grayscale likely wouldn't be the first to the party, but a $41 billion asset base plus the coveted BTC ticker could make it the winner in the long run.