Daniel Roberts, the co-CEO of Bitcoin mining company Iris Energy, has raised a “major issue” with the Spot Bitcoin ETFs. He believes this could lead to a “major problem” in the long run as these funds continue to attract more investors.
What Is The Major Issue With Spot Bitcoin ETFs
Roberts expressed concerns about Bitcoin’s limited supply in a post on X (formerly Twitter), commenting that this could potentially be problematic for the Bitcoin ETFs. He pointed out that these ETFs are the first to have an underlying asset with a capped supply. BTC’s maximum total supply is 21 million BTC, and no more can be mined after that.
Roberts highlighted a potential problem if these ETFs acquire 30% of available Bitcoin or if those holders refuse to sell. Typically, to create additional shares in the ETF, the issuer must acquire more BTC and hold them as the underlying asset for the fund. Therefore, Roberts’ concern revolves around what could happen if there were no more Bitcoin available for acquisition.
Following his remarks, other X users attempted to alleviate his concerns. One user, in particular, stated that this wouldn’t necessarily be a problem, as Bitcoin’s price would rise until trades began to clear. This increase in price would likely prompt some holders to sell as they aim to profit from their BTC investment.
How Did The Spot ETFs Fare On Day 1
Bloomberg analyst James Seyffart provided insights into the performance of the Spot Bitcoin ETFs on their first day of trading. In a post on X, he mentioned that these funds saw over $4.6 billion in trading volume, with Grayscale’s GBTC accounting for half of it. BlackRock and Fidelity followed closely, recording just over $1 billion and $712 million, respectively.
BlackRock may have been the biggest winner of the day, as Seyffart suggested that a large portion of GBTC’s trading volume might have been outflows rather than inflows. It was reported that Grayscale implemented a fee of 1.5%, leading the Bloomberg analyst to argue that investors may have offloaded their GBTC shares for Spot Bitcoin ETFs with lower fees.
ProShares Bitcoin Strategy (BITO) ETF also experienced a busy day, breaking its all-time volume record with $2 billion traded. Bloomberg analyst Eric Balchunas suggested that redemptions may have contributed to some of the trades, with investors of the BTC futures ETF shifting their funds to a Spot Bitcoin ETF.
Analysts at crypto analysis firm K33 had previously predicted that this was likely to happen, as institutional investors look to rotate some of their funds to the Spot ETFs.
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