According to Simeon Hyman, a global investment strategist at ProShares, the Bitcoin spot market still faces challenges, like varying prices across exchanges and risks associated with platforms.
During his talk on Bloomberg TV, Hyman pointed out that Bitcoin’s prices differ across various platforms, while the futures for this cryptocurrency rely on a mix of prices for daily settlements. He also raised doubts about how cash transactions and redemptions would practically work in this setup.
In this process, broker-dealers swap cash instead of the actual security with the issuer. The issuer then takes responsibility for buying and selling Bitcoin. Typically, ETFs use an “in-kind” mechanism where dealers hand over the asset itself to issuers and get ETF shares in return.
Hyman described the Bitcoin futures market as mature, liquid, and well-regulated. However, he highlighted the spot market as a bit “weird,” mentioning platforms like FTX, Binance, and referring to some recent news about unconventional moves.
In 2021, ProShares launched the Bitcoin Strategy ETF (traded as BITO), becoming the first Bitcoin futures exchange-traded fund listed in the US.
https://twitter.com/BloombergTV/status/1742632238133506541/video/1
SEC Chair Gary Gensler has previously expressed worries about potential fraud and manipulation in crypto markets. These concerns might influence regulators as they consider approving a spot Bitcoin exchange-traded fund.
Bitcoin took a 5.6% dip to $42,283 on Wednesday, reversing direction just before an upcoming January 10 deadline. This deadline could potentially see the US SEC greenlight the first exchange-traded fund linked directly to Bitcoin’s actual price.
