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Smart Finance APP has learned that Reggie Browne, the ETF trading chief of market maker GTS, stated on Monday that the trading price of spot Bitcoin Exchange Traded Funds (ETFs) would have a significant premium over their net asset value. Browne mentioned that if a fund is approved, its trading price could have a premium of up to 8% over the underlying asset value. In comparison, the ProShares Bitcoin Strategy ETF (BITO), holding Bitcoin futures, has had an average premium of 0.02% over the past year.
"The width of the spread is not the issue; I think the issue will be the premium to net asset value," said Browne. "That will be a crazy number."
The U.S. Securities and Exchange Commission (SEC) is reluctant to allow brokers to directly trade spot Bitcoin. Browne suggests that this could increase the difficulty for brokers to trade ETFs since they need to use Bitcoin futures to hedge positions during market-making.
This additional complexity might make it challenging for the trading prices of Bitcoin ETFs to align with the net asset value, potentially leading to a significant premium over the asset's net value.
Browne made these remarks as Wednesday marked the SEC's deadline to decide on at least one application out of nearly 12 for spot Bitcoin ETFs.
Browne also anticipates that, if approved, investors will inject at least $2 billion into Bitcoin ETFs in the first 30 days of listing. He projects that such funds could attract $10 billion to $20 billion in funds throughout the year. |
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Post time 18-1-2024 07:11:54