Spot Bitcoin ETFs to Trade 8% Above Fair Value, Predicts Expert

By: Isha Das

Reggie Browne, Co-Global Head of ETF Trading and Sales at liquidity services provider GTS, predicted a potential trading premium for spot Bitcoin ETFs in a recent interview. He estimated that these ETFs might initially trade at an 8% premium to their net asset value (NAV).

According to Browne, this significant premium could arise due to the complex regulatory constraints that compel US broker-dealers to rely on Bitcoin futures for hedging, instead of trading Bitcoin directly. A majority of ETF applicants have chosen the cash creation model to cater to the SEC's requirements. Despite having to navigate through these challenges, Browne anticipates a future transition to in-kind services.

As several spot Bitcoin ETF applications await judgement from the SEC, the future of bitcoin trading within the mainstream financial framework comes into sharp focus. This scenario has resulted in the crypto community anticipating a premium on the spot Bitcoin ETF, reflecting the ongoing regulatory challenges and the evolution of Bitcoin trading.

It's worth noting that the SEC's additional comments on the latest round of filings hasn't deterred the applicants. Insiders maintain that this unexpected development is just part of the procedure, without any change in the SEC's planned course of action.