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.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.