Arthur Hayes: Bitcoin ETF opens the door for traditional finance, what trading opportunities will it create?

The Bitcoin spot ETF officially launched last week! The trading volume has exceeded 10 billion US dollars. Arthur Hayes, the founder of BitMex with a traditional finance background, released a lengthy article "ETF Wif Hat", discussing the intersection of traditional finance and Bitcoin and how it will impact the market. What trading opportunities will it create?

With the Bitcoin spot ETF trading volume surpassing 10 billion US dollars in just two days, is it a success or a bubble?

Which Exchanges Will Benefit?

Arthur Hayes used the example of IBIT from BNY Mellon, where the Net Asset Value (NAV) of the fund is based on the BTC/USD price at 4:00 PM Eastern Time. The CF Benchmark receives prices from Bitstamp, Coinbase, itBit, Kraken, Gemini, and LMAX between 3:00 PM and 4:00 PM Eastern Time to reduce price differentials, and traders will directly trade on these exchanges.

More Bitcoin Spot Arbitrage Opportunities

The exchanges designated by CF Benchmark are concentrated in the West, but Bitcoin is a global market, and currently, the largest exchange is Binance. Hayes believes:

The Bitcoin market will have predictable and lasting arbitrage opportunities for the first time!

He also expects there to be lucrative spot arbitrage opportunities.

The Rise of Bitcoin Derivative Products

Hayes believes that after ETFs are listed for some time, related options products will begin to appear on U.S. exchanges. Grayscale, for example, submitted a strategy ETF called The Grayscale Bitcoin Trust Covered Call last week to the SEC. Another report mentioned that the New York Stock Exchange submitted a 19b-4 document allowing options on "commodity-based trust shares" to be listed and traded. Bloomberg ETF analyst Eric Balchunas explained that this filing was to list options for Bitcoin spot ETFs, which could be approved in as little as about 2 months. He believes that in the coming months, there may be as many as a dozen similar leveraged Bitcoin ETF products on the market.

Bitcoin spot ETF trading volume approaches $10 billion, ProShares submits five leveraged Bitcoin ETFs

Using Bitcoin Spot ETFs for Financing

Although the SEC prohibits Bitcoin held by Bitcoin spot ETFs from being used as collateral, using stocks as collateral for financing is common in traditional finance. ETFs issued by high-quality asset management companies should be able to be used for loans. Compared to the difficulty of borrowing fiat with Bitcoin as collateral in traditional finance, ETFs open the door to financing for everyone.

2024 Turbulence, Bitcoin to Reach Historic Highs

Hayes also mentioned not to be discouraged by the low Bitcoin prices since the start of ETF trading. His strategy is to wait until mid-March for the BTFP update and the Federal Reserve interest rate decision before adding cryptocurrency risk to his investment portfolio.

Hayes emphasizes:

The bull market is just beginning. In terms of price movements, 2024 will be a turbulent year. It is expected that by the end of the year, the market value of Bitcoin and the entire cryptocurrency complex will reach or exceed historical highs.

Arthur Hayes: Cryptocurrency and market predictions for March 2024, Bitcoin to undergo a 30-40% correction