Reggie Browne, Co-Global Head of ETF Trading and Sales at GTS, recently shared his predictions on the potential trading dynamics of spot Bitcoin exchange-traded funds (ETFs) in an interview with Bloomberg. Browne anticipates these ETFs to trade at a significant premium, possibly as high as 8% above their net asset value (NAV).
Browne believes that the spreads will be competitive and tight, with the market maker community ready to offer a lot of liquidity. However, he also pointed out a critical concern, the premium to NAV. According to Browne, US broker dealers are unable to trade Bitcoin cash within their broker dealers, forcing them to trade hedges over futures and trade it on a premium. This complexity arises from the cash creation model imposed by the SEC and regulatory constraints that limit direct Bitcoin trading within US broker dealers, compelling them to rely on futures for hedging.
Browne also discussed the topic of in-kind creations and redemptions, which were contentious points during negotiations with the Securities and Exchange Commission (SEC). Despite the challenges, he remains optimistic about their future implementation.
Eric Balchunas, a Bloomberg ETF expert, also commented on the potential premium, expressing surprise at the anticipated high rate. He compared it with Canada’s spot ETFs, which are also cash creations but have much smaller premiums, despite occasional spikes.
The crypto community is closely watching the SEC as it approaches a critical deadline to decide on the first batch of several spot Bitcoin ETF applications. Prominent asset managers such as BlackRock, Fidelity, Ark Invest, Bitwise, Franklin Templeton, Grayscale, WisdomTree, and Valkyrie have pending applications.
Browne believes that the approval of spot Bitcoin ETFs could attract substantial investor interest, projecting massive inflows over the first year. He expects investors to add at least $2 billion to spot Bitcoin ETFs within the first 30 days they trade, if approved. For the full year, he sees $10 billion-$20 billion in the funds. This prediction underscores the significant interest and potential market impact of spot Bitcoin ETFs.
At the time of the interview, BTC was trading at $46,768.
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided entirely at your own risk.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 🇨🇦 |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Eric Balchunas, Reggie Browne |
| Companies | Valkyrie, Ark Invest, Shutterstock, Franklin Templeton, Bitwise, NewsBTC, Grayscale, Securities and Exchange Commission (SEC), Bloomberg, WisdomTree, TradingView.com, Fidelity, BlackRock, GTS |
| Currencies | Bitcoin |
| Securities | None |
