Robinhood Adds $GBTC and $ETHE to Its App

Financial services company Robinhood has listed Grayscale’s Bitcoin Trust and Ethereum Trust to its platform. Read CNL.

Posted by by Bryan Yanzon
 Robinhood Adds $GBTC and $ETHE to Its App
  • Robinhood has listed Grayscale’s Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) on its platform.
  • Investment products GBTC and ETHE function like stocks.
  • The price of GBTC and ETHE hardly trade on a 1:1 ratio.

Investment and trading company Robinhood has listed Grayscale’s Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) on its platform. Hence, Robinhood users can now buy and sell GBTC and ETHE via its app.

Investment products GBTC and ETHE function like stocks. It enables the investors to get exposure to Bitcoin and Ethereum prices without actually owning these cryptocurrencies. Grayscale is an investment firm that supervises custody so that buyers can get cryptocurrency.

The price of GBTC and ETHE hardly trade on a 1:1 ratio, despite it being almost equal to the price of the original cryptocurrencies. One reason for the price difference is the long lock periods, the price on the open market gets affected when whales eventually sell.

The reason why Robinhood traders might get interested in trading these assets is because of the discrepancy, where they don’t have to think about custody issues. In addition, traders can buy them for a cheap price if the timing is right.

Grayscale is in the middle of proposing to change its Bitcoin trust into an exchange-traded fund (ETF). Yet, the US Securities and Exchange Commission has yet to approve a Bitcoin spot ETF.

Grayscale Investments CEO Michael Sonnenshein explained in an interview with CNBC last April that the SEC could violate the Administrative Procedure Act once the Bitcoin spot ETF is turned down wholly.

“GBTC share prices will likely move to trade in line with NAV. Then, the shares would be uplisted from OTCQX to NYSE Arca,” Grayscale’s Chief Legal Officer Craig Salm explained what the conversion process would be if the trust became an ETF. Grayscale has seen an 18% drop in crypto revenue for Q1 and recently laid off over 300 of its employees. Their revenue was up from $48 million to $54 million for the quarter. However, it has been down by 39% from a year-over-year comparison.