Daniel Roberts, co-CEO of Bitcoin mining company Iris Energy, has voiced concerns over Spot Bitcoin ETFs, citing Bitcoin’s limited supply as a potential issue. Roberts highlighted that Bitcoin ETFs are the first of their kind with an underlying asset whose supply is capped at a specific amount, with Bitcoin’s maximum total supply being 21 million BTC.
Roberts’ worry is that a problem could arise if these ETFs purchase 30% of the available Bitcoin or if the holders refuse to sell. Typically, to create more shares in the ETF, the issuer needs to acquire more BTC to hold as the underlying asset for the fund. The concern is what could happen if there were no more Bitcoin to acquire. However, other users on X, formerly known as Twitter, tried to alleviate his concerns. One user argued that this wouldn’t be a problem as Bitcoin’s price would simply increase until trades began to clear, likely forcing some to sell to profit from their BTC investment.
On the first day of trading, Spot Bitcoin ETFs performed well, according to Bloomberg analyst James Seyffart. He reported that these funds recorded over $4.6 billion in trading volume, with Grayscale’s GBTC accounting for half of it. BlackRock and Fidelity followed, recording just over $1 billion and $712 million, respectively. Seyffart suggested that BlackRock may have been the biggest winner of the day, as a large portion of GBTC’s trading volume might have been outflows rather than inflows. This is because Grayscale’s fee was reported to be 1.5%, leading investors to potentially offload their GBTC shares for Spot Bitcoin ETFs with lower fees.
The ProShares Bitcoin Strategy (BITO) ETF also had a busy day, breaking its all-time volume record with $2 billion traded. Bloomberg analyst Eric Balchunas suggested that redemptions might have accounted for some of the trades, with investors of the BTC futures ETF moving their funds to a Spot Bitcoin ETF. Analysts at crypto analysis firm K33 had previously predicted that this was likely to happen as institutional investors will look to rotate some of their funds to the Spot ETFs.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Daniel Roberts, Eric Balchunas, James Seyffart |
| Companies | ProShares Bitcoin Strategy (BITO) ETF, Iris Energy, Spot Bitcoin ETFs, Fidelity, BlackRock, Grayscale, K33 |
| Currencies | Bitcoin |
| Securities | Grayscale’s GBTC, BlackRock, ProShares Bitcoin Strategy (BITO) ETF |
