ETFs lower barriers of entry into industry, says broker

Thomas Uhm, broker at Jane Street Capital, said ETFs are useful and capable of lowering the barriers of entry for those wanting to get involved in the cryptocurrency industry.

During a fireside chat with Abhishek Jain – head of international ETF Trading at electronic trading firm DRW – the pair discussed the differences between a future spaced ETF and a spot-based one and the challenges that the previous will face.

Future-spaced ETFs are protected from market volatility but are vulnerable to roll costs, Uhm said.

Uhm mentioned when the market is in contango – when the spot price is lower than the future price – negative roll costs occur as the investor will lose money in their initial investment.

The pair, alongside Michael Ippolito, co-founder of Blockworks, also discussed the US Securities and Exchange Commission (SEC) decision to regulate the future-spaced ETF as a positive move forward for the industry.

“The decision is a stamp of approval as well as a cautious first step for the cryptocurrency industry,” Uhm said.

Jain was bullish on the possibility of the spot-ETF finally being regulated by the SEC. However, he doubted that we would see it anytime soon.

“It’s inevitable that we’ll see a Bitcoin spot-ETF, just not this year,” he admitted.