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Approval Imminent for Bitcoin Spot ETF, Early Issuers with High Issuance Volume Will Win

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Approval Imminent for Bitcoin Spot ETF, Early Issuers with High Issuance Volume Will Win

Bloomberg ETF analyst Eric Balchunas mentioned Bitcoin spot ETF in an interview with Blockworks. He pointed out that during the initial issuance of an ETF, especially in the first few weeks, the trading volume and inflow of funds into the ETF are more effective than any marketing efforts. Could it be possible that ETF issuers are buying a large amount of their own ETF shares to make themselves look like winners?

Rushing ETF Volume, Whether It's Fake Assets or Not

Balchunas mentioned that whether it's internal or external funds, as long as the volume of the ETF surges in the early stage of issuance, it can make the issuer look like a winner, even if it's "fake assets"!

Although he added in X:

The term "fake assets" may be too exaggerated. Because the Asset Under Management (AUM) is real, just not fresh and organic.

BlackRock, Bitwise, and Ark Have Started to Lay Out

BlackRock previously planned to inject a $10 million seed fund into the Bitcoin spot ETF with the code IBIT on January 3. A "seed fund" refers to funds raised by the issuing institution before the ETF is officially listed, which will be used to purchase the index or assets tracked by the ETF to ensure sufficient liquidity at the listing and reduce the issuer's risk.

Bitwise also stated in its latest filing last week that it will inject up to $200 million in seed funding to pave the way for its ETF.

Ark Invest also cleared all positions of Grayscale Bitcoin Trust (GBTC) in ARKW last week and instead bought $92.07 million of BITO Bitcoin futures ETF to maintain the Bitcoin beta coefficient in ARKW. Once Ark's Bitcoin spot ETF ARKB is approved, it is believed that the holdings of BITO will soon be liquidated and converted into Ark's own ARKB.

The end of the Grayscale era? Ark clears all GBTC holdings and buys BITO instead