Replying to Avatar Alan β‚Ώ

Spoke with an investment banker friend who says the notion that banks selling the spot ETF don’t buy the underlying Bitcoin until 1 day later is not true. They need to buy BTC at the time they sell the ETF to customers (or before), otherwise they risk losing $.

For the most part, they buy directly from Coinbase and are paying high fees to do so. They also have limits on how much they can buy, as only so much is available at any time.

Going to be a wild year. #Bitcoin
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π–‹π–Žπ–†π–™π–‰π–Šπ–“π–Žπ–Šπ–— (Β―`◕‿◕´¯) 2y ago

No. First of all there is not enough BTC out there for everyone. They will hold the fiat and can hedge with options and futures while they work the OTC desk.

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Alan β‚Ώ 2y ago

Afaik it must be backed 1:1

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γ‚„γƒˆγƒŠ 2y ago

Yes, and this is actually regulated by the SEC unlike shitcoin β€œexchanges” that we are used to. 1:1 is required.

Customer gives issuer cash, issuer gives customer their shares and the cash to coinbase, coinbase puts bitcoin equivalent in the issuers account/wallet with them.