Spot bitcoin ETFs: What investors need to know

The Securities and Exchange Commission’s (SEC) January 10 deadline for a spot bitcoin ETF decision is less than a week away. Still pending approval, a green light by SEC regulators would allow firms to offer traders bitcoin (BTC-USD) ETFs, such as Grayscale’s Bitcoin Trust (GBTC).
VettaFi Financial Futurist Dave Nadig sits down with Yahoo Finance Live’s Julie Hyman and Josh Lipton in-studio to discuss the possibilities of SEC approval, calling it a “horse race” to have ETF offerings ready to go on the first available trading day.
“I don’t think that this is going to be one of those things where we immediately have $10 billion in new assets show up,” Nadig says on demand. “Remember, one of the funds here is Grayscale’s GBTC converting. It already has $25 billion in it, so we know what that demand looks like.”
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The clock is ticking down now for an SEC approval of a spot Bitcoin ETF in the US in the coming days the crypto world is going to find out whether 14 different money managers and ETF issuers will be allowed to launch their own spot Bitcoin exchange traded funds here with what

This will mean for crypto Traders and what we can expect Dave NAC is still with us verify Financial futurist this has really been the big Topic in the ETF world for the past six months I don’t know but it’s obviously heated up January 10th is the deadline we’re

Looking at because that’s when the SEC has to give some sort of answer to one issuer in particular Arc in 21 shares but the anticipation is we’ll get an answer on all of them so what’s your what is the next week two weeks month going to look like on this I suspect the

Next thing we’ll see is that both the exchanges that are going to have to trade these products and the issuers will finish up their paperwork there’s a couple different forms that have to get filed that’s when we’ll get a bunch of information like what are the expense

Ratios going to be we still don’t know that these things could come out free they could come out at 2% we have no idea I think everybody’s thinking around 50 basis points is probably the over under on that but we have no idea so we’ll get that when we see that from the

Issuers then we’ll get the approval for these things to trade and the SEC may or may not give a hard date there to say everybody can start trading say on January 21st they may simply say all right everybody go in which case we might see some of these things start

Trading next week we might see a bit of a horse race to see who their Capital markets desk lined up first and some folks may be ready at 9:30 on one trading day and other folks may not be able to trade until noon just because there are a lot of operational

Considerations in getting any ETF off the off the ground and if if when Dave so the SEC green lights you know this new product where would you what would you expect demand to look like and where do you think Dave maybe the demand comes from and do you think this is this is

Retail it’s Ras it’s institutions I think initially this is pure froth right that’s the issue because it is the story we’ve all been talking about because Bitcoin has already had a heck of a run in the last few months I don’t think that this is going to be one of those

Things where we immediately have 10 billion in new assets show up remember one of the funds here is grayscales gbtc converting it already has $25 billion in it so we know what that demand looks like to me the real question is when we look back say in a couple of weeks maybe

A month or two how much incremental demand has there been over that 25 billion because that’ll get redistributed a little bit the great scale won’t hang on to all of that it’ll move to a black rock product or a vanac product or somewhere in there so when we

Add all that back up is there a lot of demand I think there’s some most of the new demand will probably come from what I would consider more portfolio allocators not Traders not folks who were just trying to take a run on bitcoin those folks already know how to

Do that they have lots of ways to do that but if you’re a financial adviser and you’re running a model portfolio putting a 3% slug in your aggressive version of the model that’s where I think the initial assets are going to come from and those financial advisers

You talk to those people a lot how are they making the decision of which one is it going to be purely I mean as you know a lot of the ETF flows right now are fee based is that what it’s going to be is it that the cheapest one is going to win

The cheapest one’s certainly going to have a bit of a leg we already know that Invesco and Galaxy are going to wave the fee for the first six months that’s always a little bit of a gimmick I don’t think most advisers get sucked into those kinds of fee waivers um if one of

The big players the big known names say like a black rock or a Fidelity or somebody comes out with the cheapest one I think that’s tough to compete against but interestingly I think it’s where the volume is in the first couple weeks that matters more than the cost so in that

Case it does matter who starts trading first it can because if we get a big slug of volume and then the derivatives Market shows up and all of a sudden we have a live options Market on that particular ticker that’s very hard to ever upset so we’ve seen this before

With things like gold GLD finally started trading options you could come out with the cheapest best gold product in the world you will never Pride GLD out of that derivatives ecosystem do we know that there is going to be an options Market automatically like if the SEC approves it do they

Approve it all is there then options then it would go to the actual options dealers to decide effectively when they want to do this now when GLD got options there was a bit of a hiccup there about how it was going to be cleared Etc I have a feeling those conversations have

Long since happened already everybody understands that the options Market on this is going to be enormously valuable and enormously powerful I mean we you guys have talked about it a ton of times single you know people trading zero dat expiration options is almost replacing people trading stocks in some cases I

Think you’re going to see something very similar happen here with Bitcoin I suspect we’ll have a good clean options chain with real volume on it within weeks at the on the outside and possibly within days if somebody’s done a lot of pre-planning wow Dave thank you so much

For on the show today that was great Insight appreciate than for having me