Reggie Browne, co-Global Head of ETF Trading and Sales at GTS, has raised the possibility of Bitcoin spot Exchange-Traded Funds (ETFs) trading at a premium due to the current regulatory frameworks that allow U.S. institutions to manage cryptocurrencies. Browne anticipates that this could result in substantial costs for investors, potentially around 8%, due to the complexity of Bitcoin ETFs and the premium at which Bitcoin futures are currently trading compared to the spot price.
Despite these complexities, Browne reassured that there is ample liquidity in the market, ensuring a competitive and tight spread. He also highlighted the readiness of the market-making community to provide liquidity for this structure, suggesting that spread width should not be a significant concern.
Browne also expressed his expectation that in-kind creations and redemptions will eventually become a reality for Bitcoin ETFs. While these mechanisms have been points of contention in negotiations with the Securities and Exchange Commission (SEC), Browne believes they will materialize after overcoming certain challenges. Currently, all companies seeking ETF approvals have agreed to the cash-only model, which Browne sees as a means to initiate progress.
As the crypto community awaits the SEC’s decision on the pending ETF applications from prominent asset managers like Ark Invest, BlackRock, Fidelity, Grayscale, WisdomTree, Franklin Templeton, and Valkyrie, the focus remains on the evolving landscape of Bitcoin ETFs and the potential for in-kind transactions in the future.
However, the prospect of spot crypto ETFs has also raised concerns over potential risks for investors, citing the notorious volatility and susceptibility to illicit activities associated with digital assets. Dennis Kelleher, CEO of financial reform nonprofit Better Markets, voiced apprehension, stating, “What’s going to happen, unfortunately, is lots and lots of Americans in our view, are going to get hurt financially.”
While anticipation for SEC approval continues, some observers speculate about the potential for a Bitcoin pullback following the awaited regulatory decision. Chris Weston, Head of Research at Pepperstone Group Ltd., noted that there are “no signs” of an imminent sell-the-news event. However, Tony Sycamore, a market analyst at IG Australia Pty., suggests that the $51,000 level could be a possible target before any potential retreat occurs.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 🇦🇺 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Chris Weston, Tony Sycamore, Reggie Browne, Dennis Kelleher |
| Companies | Valkyrie, Grayscale, Better Markets, BlackRock, Pepperstone Group Ltd., GTS, Bloomberg Television, WisdomTree, Securities and Exchange Commission, Ark Invest, Franklin Templeton, IG Australia Pty., Fidelity |
| Currencies | Bitcoin |
| Securities | None |
