The Greatest Place to Buy Bitcoin ETF Myths Busted

With the imminent approval of a spot Bitcoin ETF by the US Securities and Exchange Commission (SEC), Alistair Milne, Chief Investment Officer (CIO) of Altana Digital Currency Fund, has taken the initiative to dispel various myths surrounding Spot Bitcoin Exchange-Traded Funds (ETFs). In this blog post, we delve into the most shocking rumors and debunk them to provide a clearer understanding of the potential impact of spot ETFs.

Busting Myths: A Look At The Most Shocking Rumors

Myth 1: Spot ETFs diluting the 21 million BTC supply with “paper Bitcoin”
Alistair Milne emphasizes the legal and operational frameworks governing spot ETFs, refuting claims that they could inject “paper Bitcoin” into the market. He clarifies that spot ETFs are obligated to invest net inflows in BTC, held by custodians and subject to full audits.

Myth 2: Manipulation by ETF providers
Milne debunks the notion of manipulation by highlighting that ETF providers like BlackRock, Fidelity, and Bitwise are proactively managing liquidity by seeding their ETFs with cash on exchanges. The actions of spot ETFs are dictated by inflows and outflows, not discretionary decisions of fund managers.

Myth 3: Spot ETFs involving derivative volumes
Unlike derivative ETFs, spot Bitcoin ETFs involve actual BTC, establishing a direct link to the cryptocurrency’s market dynamics. Milne predicts that the increase in spot BTC trading will make it more challenging to manipulate its price.

ETF That Underperforms Bitcoin Will Go Out Of Business

Market Makers (MMs) and others arbitrage the ETF’s stock versus spot Bitcoin to ensure pricing accuracy. Milne explains that a spot ETF underperforming Bitcoin (before fees) is likely to go out of business, as its value mirrors Bitcoin’s market performance.

Investor Movement Dynamics and Trustworthiness of ETFs

Addressing potential shifts from Grayscale Bitcoin Trust (GBTC) to other ETFs, Milne assures that GBTC will instantly be at par value, having no significant effect on other ETFs. He also dispels doubts about the trustworthiness of ETFs, stating that BTC holdings will be attested to by custodians and audited by reputable firms.

As the countdown to the approval of spot Bitcoin ETFs continues, it is crucial to separate fact from fiction. Alistair Milne’s insights debunk the prevailing myths, offering a more nuanced understanding of the potential impact on the cryptocurrency market. Spot Bitcoin ETFs, when approved, are poised to bring transparency, liquidity, and legitimacy to the crypto investment landscape.

Disclaimer: The information provided in this blog post is based on the opinions and insights of Alistair Milne and should not be considered financial advice. Always conduct thorough research and consult with financial professionals before making investment decisions.

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