The fast launch of the Bitcoin ETF has inspired the crypto community. DeFi Unchained Capital CEO Parker Luce does not share this joy and believes that an exchange-traded fund (ETF) on BTC will be disadvantageous for investors.
During his podcast “Bitcoin supply chain & debit celing,” the former Deutsche Bank economist stated that when buying ETF stocks, investors
take assume the risks of a market maker. The market maker puts them in the price at which he offers the ETF in the stock market.
“The Exchange Traded Fund efficiently processes bitcoin as if it were a traditional financial asset. If an investor buys it through an ETF, then you assume additional market maker risks. As a result, he chooses one of the more risky ways of owning bitcoin than if he bought it on the exchange. ”
Parker Luce also believes that the Securities and Exchange Commission (SEC) chose the lesser of evils when it allowed the launch of an ETF on bitcoin futures than it would have allowed a direct ETF on bitcoin.
“A futures-based bitcoin exchange-traded fund could be an effective excuse for the SEC to avoid launching real bitcoin ETFs.”
The expert is generally not happy with the launch of the ETF on bitcoin futures and noted that this could provoke a slight increase in the price of the cryptocurrency. The reason may be a temporary increase in the interest of private and institutional investors in bitcoin. However, this does not change the bitcoin adoption curve and does not fundamentally affect the cryptocurrency market.
Pantera Capital CEO Dan Morehead does not consider ETFs to be an additional risk, but worries that the launch of Bitcoin ETFs will bring the price down, as it did in 2017 with BTC futures. Before the SEC approved the launch of a Bitcoin ETF based on ProShares futures, the SEC chairman confirmed that he is not opposed to launching a narrow class of exchange-traded funds (ETFs) on Bitcoin, which will invest in futures contracts rather than in cryptocurrency directly.
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