Crypto: What Investors Need To Know About Spot Bitcoin ETFs

There is less than a week left until the Securities and Exchange Commission's (SEC) deadline of January 10 to make a decision on the Bitcoin Spot ETF. The green light from SEC regulators, which is still pending approval, will allow companies like Grayscale Bitcoin Trust (GBTC) to offer Bitcoin ETFs (BTC-USD) to traders.

VettaFi Financial Futurist Dave Nadig sat down in studio with Yahoo Finance Live's Julie Hyman and Josh Lipton to discuss the potential for SEC approval, calling it a "race" to get ETF offerings ready for the first day of trading.

"If we have $10 billion in new assets, I don't think it's going to be one of those things," Nadig said when asked.

For more expert insights and the latest market developments, click here to watch the full episode of Yahoo Finance Live.

Editor's Note: This article was written by Luke Carberry Maughan .

Video transcript

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Julie Hyman : In the coming days, the time is approaching for SEC spot Bitcoin ETF approval in the United States. The cryptocurrency world has 14 different fund managers and ETF issuers to find out if they can launch their own Bitcoin spot exchange-traded funds. Here's what this means for cryptocurrency traders and what we expect: Dave Nadig, Vetafy's financial futures expert, is still with us.

It's been a pretty big topic in the ETF world for the past six months, I don't know. But it was obviously too hot. January 10th is the last date we think because that's when the SEC has to give some sort of response to the issuer, specifically ARC and 21shares. But we hope to have answers for all of them.

Dave Nadig : Yes, absolutely.

Julie Hyman: So what do you have next week, two weeks or month for that matter?

Dave Nadig: I think the next thing we'll see is the exchanges will have to trade these products and the issuers will complete their documentation. There are several different forms that need to be filled out. We'll have more information then, like what will the expense ratios be? We don't know yet. These things can be free. They can reach 2%. We have no idea.

I think everyone thinks about 50 basis points is probably more or less. But we have no idea. So we'll get it when we see it from the publishers. Then we get permission to exchange these items. And the SEC may or may not give an exact date that everyone can start trading, like January 21st. You might say, "Well, everybody goes." A week. We may be seeing something of a race to see who can be first in line at their capital markets table. And some people might be ready by 9:30am on a business day. And other people may not be able to trade until noon just because there are so many practical issues involved in launching an ETF.

Josh Lipton : And Dave, if the SEC gives the green light to this new product, where do you think the demand will be? And where do you think the question came from, Dave? Do you think we're talking about retail, RIAs, institutions?

Dave Nadig: I think everything is smooth in the beginning, right? That is the question. Since this is the story we've all been talking about, with Bitcoin gaining so much popularity over the past few months, I don't believe $10 billion in new assets will be one of the things we have. Far away. . They pop up.

Remember, one of those funds is Greyscale's GBTC exchange, which has a $25 million. So we know what this question looks like. The big question for me is, if we look back, in a few weeks, maybe a month or two, how much did the demand increase beyond $25 billion? Because they're going to redistribute it a little bit. You see, grayscale never stops. It moves to a BlackRock or VanEck product or something.

So if we add them all up, will there be much demand? I think so. Rather than traders or simply people trying to manage Bitcoin, most of the new interest will likely come from what I call portfolio makers. These people already know how to do it. There are many ways to do this. But if you're a financial advisor and you're running a model portfolio, adding 3% to your monstrous version of the model, I think that's where the first share comes from.

Julie Hyman: And these financial advisors, you talked to these people…

Dave Nadig : Always.

Julie Hyman: A lot. How do you make decisions? It will be ... I mean, as you know, most ETF flows are now fee-based. Will it be so? Will the cheapest win?

DAVE NADIG: The cheapest will definitely have legs. We already know that Invesco and Galaxy will release commissions for the first six months. It's always some kind of trick. I don't think most consultants are into such fees. I think if one of the big guys like Blackrock, Fidelity or other big names offered a cheaper option it would be hard to compete with them. But the interesting thing is that in the first few weeks I think volume is more important than cost.

Preparation: Ethereum and Bitcoin ETFs Explained.