24th April 2024 > > ETFs.

tl;dr

BTC and ETH ETFs.

Market Snap

Market Wrap

A record close for the FTSE suggests to me that recent commentary in the press suggesting that London is losing its financial lustre is missing the point.

Curious Cryptos’ Commentary – Spot BTC ETFs

BTC prices are essentially unchanged for the last four weeks, though with a bit of 10% vol or so to the upside to kill the leveraged shorts, then 10% vol or so to the downside to kill the leveraged longs This is an iron rule of financial markets. Financial markets will cause the maximum amount of pain to the maximum number of participants.

During this month ETF flows have been mixed, largely because of the daily drawdown from GBTC with its uncompetitive fee. There has been a lot of attention on the fact that spot BTC ETFs have been the fastest growing ETF asset class ever, and by a long way.

Meh, the contrarian in me says.

I think the performance to date is very disappointing.

…

The alternative view is that I should learn to be a little bit more patient.

Legacy Wealth Management and United Capital Management of Kansas (combined total AUM of $785mm) have just announced that $20mm of capital from both has been invested in Fidelity’s spot BTC ETF, rather accurately reflecting my belief that 5% of all investment assets will eventually flow into cryptos, and largely into BTC.

Eric Balchunas, ETF analyst at Bloomberg, knows his stuff:

“This is as Boomer as it gets. Likely a wonderful sight for those hoping to see long-term adoption and an absolute nightmare for the RIA Skeptics Branch of the Underwhelmers Club.”

Curious Cryptos’ Commentary – Spot ETH ETFs

Eric Balchunas called the January approval by the SEC for spot BTC ETFs very early on.

He is rather downbeat on the topic of spot ETH ETFs, believing we are a long way off approval. And indeed, the SEC rejected two applications this week. The SEC is fond of issuing rejection notices. It’s almost a Pavlovian reaction.

The final deadline is May for the SEC to decide on a raft of potential ETFs. It is likely that the proposers will have to take the SEC to court once more. You will recall that a judge’s description of the SEC action’s as “arbitrary and capricious” forced the SEC’s hand with respect to BTC ETFs.

I look forward to a similar judgement later this year.