Podcast Summary
This podcast episode delves into the recent launch of 11 Bitcoin ETFs, their potential impact on the market, and the challenges of measuring this impact. The hosts also discuss the role of market makers in the ETF space, the potential for future inflows into ETFs, and the implications of the SEC’s approval of a Bitcoin ETF. The episode concludes with a discussion on the politics surrounding Bitcoin and the revolutionary nature of the underlying technology.
Key Takeaways
Bitcoin ETFs and Market Impact
- ETF Launch: The launch of 11 Bitcoin ETFs has stirred the market, with speculation that a significant portion of the money flowing into these ETFs may be reshuffling from Canadian ETFs, GBTC, and Bitwise.
- Market Makers: The hosts highlight the importance of efficient market makers in the ETF space, such as Citadel, Jane Street, and Virtu, who create and redeem shares, hedge their positions, and ensure they have enough of the underlying asset.
- Future Inflows: The potential for future inflows into ETFs is discussed as more platforms and advisors turn on the product. However, the hosts emphasize that the real flows into ETFs will take time to materialize.
SEC’s Role in Bitcoin ETF Approval
- SEC Approval: The SEC’s approval of a Bitcoin ETF was a significant event, with the involvement of high-profile figures like Elizabeth Warren and the Biden administration adding to the frenzy. The approval document addressed the question of whether futures prices are comparable to spot prices and concluded that surveilling the futures market is sufficient to catch manipulation.
- Political Influence: The two Commissioners who voted against the Bitcoin ETF may have done so for political reasons. Gary Gensler’s vote was crucial in getting the Bitcoin ETF approved, and his career aspirations may have influenced his decisions regarding Bitcoin.
Future of Crypto ETFs
- Ethereum ETF: The speaker expresses excitement about the upcoming Ethereum ETF and predicts it will be a big deal. They explain the process of getting an ETF, including the need for a regulated futures market.
- Ripple ETF: The Ripple court case is mentioned, and the speaker believes it may be the third to get an ETF, but doesn’t think it will happen anytime soon due to the lack of a regulated futures market.
- Other Crypto ETFs: The host discusses the potential for other ETFs in the crypto market, highlighting the need for Congress to pass legislation to enable their creation.
Sentiment Analysis
- Bullish: The hosts express a bullish sentiment towards the impact of Bitcoin ETFs on the market. They believe that the launch of these ETFs is not a “sell the news” event and that the market remains efficient. They also express optimism about the potential for future inflows into ETFs and the upcoming Ethereum ETF.
- Bearish: There is a bearish sentiment towards the potential negative implications of the Digital Asset Anti-Money Laundering Act (DAML) bill on Bitcoin and its users. The hosts believe that the bill threatens the core principles of Bitcoin and could diminish its usability and value.
- Neutral: The hosts maintain a neutral stance on the future of other crypto ETFs, stating that their creation would require an act of Congress. They also express uncertainty about the potential impact of a change in administration on the approval of ETFs.
