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Home»BITCOIN NEWS»Cryptocurrency expert identifies ‘major problem’ with spot Bitcoin ETFs
BITCOIN NEWS

Cryptocurrency expert identifies ‘major problem’ with spot Bitcoin ETFs

By Crypto FlexsJanuary 12, 20243 Mins Read
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Cryptocurrency expert identifies ‘major problem’ with spot Bitcoin ETFs
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Daniel Roberts Co-CEO Bitcoin mining company Iris EnergyIt raised ‘an important issue’. Bitcoin ETF Spot. He believes this could lead to “significant problems” in the long term as the fund continues to attract interest from more investors.

What are the main problems with spot Bitcoin ETFs?

Roberts expressed concern. Limited supply of Bitcoin There was a post by X (formerly Twitter) about what he believed could be a problem for the Bitcoin ETF. He mentioned how this class of ETFs became the first ETFs with underlying assets. Supply is limited For a certain amount. The maximum total supply of BTC is 21 million BTC, after which no more can be mined.

According to Roberts, if these ETFs buy 30% of the available Bitcoin or their holders refuse to sell, there could be big problems. Generally, Generate more shares In an ETF, the issuer must acquire more BTC and hold it as the fund’s underlying asset. As such, Roberts’ concern stems from what could happen if there are no more Bitcoins to acquire.

But following his comments, other X users tried to allay his concerns. One user in particular decided This wasn’t really a problem price of bitcoin It will increase until the transaction begins to clear. This price increase will likely cause some people to sell as they look to profit from their BTC investments.

BTC price falls following spot ETF trading day | Source: BTCUSD on Tradingview.com

What happened to the spot ETF on Day 1?

Bloomberg analyst James Seyffart I’ve given you some insight on how to do it. Bitcoin ETF Spot The first day of trading was successful. He noted in his X post that the fund had more than $4.6 billion in trading volume. GBTC in grayscale It takes up half. black stone Fidelity came in second and third with $1 billion and $712 million, respectively.

However, BlackRock may have been the biggest winner of the day, as Seyffart hinted that a significant portion of GBTC trading volume may have been outflows rather than inflows. grayscale reported That’s why a Bloomberg analyst claims investors could have sold their GBTC shares for the Spot Bitcoin ETF with lower fees.

ProShares Bitcoin Strategy (BITO) ETF It was also quite a busy day, breaking the all-time record for daily trading volume of $2 billion. Bloomberg analyst Eric Balchunas suggested Some of the transactions with BTC futures ETF investors may have been due to redemptions. money movement Spot Bitcoin ​​as ETF.

Analysts at cryptocurrency analysis firm K33 said: previously predicted This was likely to happen as institutional investors looked to circulate some of their funds into physical ETFs.

Featured image from Freepik, chart from Tradingview.com

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