Bloomberg ETF analyst Eric Balchunas mentioned the Bitcoin spot ETF in an interview with Blockworks. He pointed out that in the early stages of ETF issuance, especially in the first few weeks, the trading volume and amount of inflow of funds for the ETF will be more effective than any advertising marketing. So, can we see ETF issuers buying a large number of their own ETF shares to make themselves appear as winners?
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First, increase the volume of ETF, regardless of whether it is fake assets or not
BlackRock, Bitwise, and Ark have started to position themselves
Balchunas mentioned that whether it is internal or external funds, as long as the volume of the ETF can be increased in the early stages of issuance, it can make the issuer appear as a winner, even if it is “fake assets”!
Although he added in point X:
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The term “fake assets” may be too exaggerated. Because the Assets Under Management (AUM) is real, it’s just not fresh (Organic fresh).
BlackRock
Previously planned to inject a $10 million seed fund into the Bitcoin spot ETF (code: IBIT) on January 3. “Seed fund” refers to the fund 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 in order to obtain sufficient liquidity when the ETF is listed and reduce the risk of the issuing institution.
Bitwise also stated in its latest filing last week that it will inject a seed fund of up to $200 million to pave the way for its ETF.
Ark Invest also fully divested its Grayscale Bitcoin Trust (GBTC) in ARKW last week and purchased $92.07 million of BITO (Bitcoin futures ETF), maintaining the Bitcoin beta coefficient in ARKW. Once Ark’s Bitcoin spot ETF ARKB is approved, it is believed that holdings of BITO will be quickly divested and converted into Ark’s own ARKB.
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End of the Grayscale era? Ark divests all GBTC and buys BITO
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Bitwise
Ark
Bitcoin spot ETF
BlackRock
Further reading
BlackRock injects $10 million seed fund in January, analyst: meets January approval prediction
BlackRock meets with SEC again, Coinbase’s role will change to “primary execution agent”