{"id":9563,"date":"2024-01-09T19:45:49","date_gmt":"2024-01-09T17:45:49","guid":{"rendered":"https:\/\/forklog.com\/en\/expert-predicts-premiums-for-spot-bitcoin-etfs\/"},"modified":"2024-01-09T19:45:49","modified_gmt":"2024-01-09T17:45:49","slug":"expert-predicts-premiums-for-spot-bitcoin-etfs","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/expert-predicts-premiums-for-spot-bitcoin-etfs\/","title":{"rendered":"Expert Predicts Premiums for Spot Bitcoin ETFs"},"content":{"rendered":"

Spot Bitcoin ETFs are expected to trade at a significant premium to NAV<\/span>. This was stated in an interview with Bloomberg<\/a> by Reggie Browne, co-head of ETF trading and sales at GTS.<\/p>\n

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The expert cited the regulatory environment, which allows American institutions to interact with cryptocurrency, as the reason.<\/p>\n

\n\u201cBroker-dealers in the US cannot conduct cash-settled Bitcoin transactions between clients. Some can, but not most. Therefore, you will hedge with futures and trade at a premium, then unwind it. To me, this will cause quite a few difficulties,\u201d<\/em> the specialist explained.<\/cite><\/p><\/blockquote>\n

According to Browne, due to this reason and the existing premium in Bitcoin futures, investors will have to pay \u201csome crazy number.\u201d Hypothetically, this figure could reach 8%, he suggested.<\/p>\n

The expert expressed hope that there will be enough liquidity to keep the spread \u201ccompetitive and tight.\u201d<\/p>\n

\n\u201cMarket makers are ready to offer good conditions for this [ETF] structure,\u201d<\/em> Browne emphasized.<\/cite><\/p><\/blockquote>\n

According to the expert, at some point, creation and redemption in-kind will become a reality.<\/p>\n

This issue previously became a stumbling block during negotiations with the SEC<\/span>. Ultimately, all companies that applied to launch the product settled on a fiat redemption model, he added.<\/p>\n

\n\u201cThey decided to do this to start the game. In-kind redemption will come after climbing a couple of mountains,\u201d<\/em> Browne predicted.<\/cite><\/p><\/blockquote>\n

Earlier, Bloomberg analyst Eric Balchunas noted that the trading volume of the GBTC<\/span> from Grayscale, which the Commission may allow to convert into an exchange-traded fund, reached ~$0.5 billion.<\/p>\n

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$GBTC<\/a> traded close to half a billion today, which is more than 99% of the 3000 current ETFs, and reminder that they are bringing a (volume) gun to a knife fight if they launch with everyone else. That said, the 1.5% fee will act as a repellent. Another fascinating sub-plot. pic.twitter.com\/506EG3PR7t<\/a><\/p>\n

\u2014 Eric Balchunas (@EricBalchunas) January 8, 2024<\/a><\/p><\/blockquote>\n