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
Will they pause trading if volume is too high???
If that is the case, given the volume on some of these ETF funds we should start to see exchanges getting low on supply would we not?
Canada’s had a spot, with 1:1 reserves, for a few years now. This covers how things are settled with intermediaries:
https://thoughtful.purposeinvest.com/how-does-a-bitcoin-etf-work/amp/
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.
Afaik it must be backed 1:1
Yes, and this is actually regulated by the SEC unlike shitcoin “exchanges” 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.
It will all be seized by the gov in the future. Cold storage only for me. Play fiat games, win fiat prizes.
If they can't get it, they can't sell it to you via the etf.
