Venture Capitalist Anticipates ETF Trading to Commence Just One Week After Approval
Matrix Port, a company, published a report on Wednesday morning that presented a pessimistic outlook for the approval of Bitcoin exchange-traded funds (ETFs). As a result, the price of Bitcoin saw a 7% decrease in response to this news.
During an interview with Laura Shinn of Unchained, venture capitalist Spencer Bogart shared his perspective on this development, highlighting the market’s sensitivity to negative news in the short term. Bogart believed that the reaction to the report indicated an overbought and fragile market.
Bogart emphasized that the report did not provide any groundbreaking information despite speculating on the political affiliations of some SEC Commissioners. He noted the market’s strong reaction to this lack of new information.
The conversation also touched on the significance of different forms of ETF filings. Bogart discussed the importance of factors such as distribution, brand, liquidity, and expense ratios for the success of ETFs. In terms of fees, he mentioned the competition among issuers, with companies like Ark Invest and Valkyrie setting their own fees. Fidelity opted for a 39% fee, while Invesco Galaxy waived fees for the first six months.
Bogart speculated on Black Rock’s fees, suggesting that they might aim for a lower fee rate due to their strong distribution and brand. He emphasized that fee competition would play a crucial role in the ETF market.
The potential impact of ETF approval on companies like Grayscale, MicroStrategy, and Coinbase was also discussed. The conversation considered Grayscale’s legal battles and internal changes in relation to ETF conversion. Bogart suggested that MicroStrategy’s stock could face challenges, affecting the premium investors pay for its Bitcoin holdings.
In terms of Coinbase, Bogart anticipated a positive impact, as the exchange serves as the custodian for the majority of ETFs. He pointed out the potential increase in trading volume and custody fees for Coinbase.
Bogart offered some quick predictions, estimating that ETFs could begin trading within a week of approval. He cautiously projected that short-term flows into spot Bitcoin ETFs might be underwhelming but anticipated exceeding expectations in the long term.