Bitcoin touches highest level in nearly two years as deadline for spot ETFs looms: CNBC Crypto World

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Ben McMillan, CIO of IDX Digital Assets, breaks down what a spot bitcoin ETF in the U.S. could mean for retail investors.

Chapters:
00:00 – CNBC Crypto World, Jan 8, 2024
0:26 – Bitcoin rises
0:56 – The headlines
3:34 – Ben McMillan of IDX

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Bitcoin touches highest level in nearly two years as deadline for spot ETFs looms: CNBC Crypto World

Today asset managers including Black Rock and grayscale disclose fees for the proposed spot Bitcoin ETFs coinbase is planning an acquisition that would allow the platform to launch crypto derivatives in the EU and Ben McMillan of idx digital assets breaks down what a spot Bitcoin ETF in the US could mean for retail

Investors welcome to cbc’s crypto world I’m Jordan Smith crypto pric is in the green to kick off the week with the much anticipated decision on spot Bitcoin FS just a couple of days away as of new Easter Bitcoin traded just under $45,000 as the expectation of an imminent

Approval of at least one spot Bitcoin ETF has propelled the cryptocurrency’s price ether and salana climbed more than 1 and a half% crypto focused stocks were mixed ahead of the sec’s decision with coinbase the grayscale Bitcoin trust and micro strategy all in the red as of no Eastern Bitcoin miners marathon and Riot

However both Rose nearly 1 12% all right let’s talk about the top stories asset managers including Black Rock Grace scale and Arc 21 shares disclose fees today for their planed spot Bitcoin ETFs as the deadline to approve these investment vehicles approaches Black Rock set a fee of. 3%

While vanck disclosed plans to charge a quarter of a percent and Arc 21 shares lowered its plan fee to a qu% from 8% as competition among participants heats up bitwise disclosed a 24% fee and Fidelity set a 39% fee from the filings we reviewed it appears grayscale also set a

Fee higher than other asset managers at 1.5% meanwhile the exchanges that will list spot Bitcoin ETFs like the NASDAQ and sio filed amended documents last week on behalf of asset managers including Black Rock infidelity the amended 19 B4 filings which notifi the SEC of a proposed rules change for an

Exchange join amended S1 filings addressing feedback from the agency it’s widely expected that once the 19 B4 filings are approved the SEC could separately approve the S1 applications of all the ETF applicants at once once next as the deadline for a spot Bitcoin ETF in the US looms SEC chair Gary

Gensler took to X to remind investors that there are risks associated with crypto genser wrote in a thread today that investments in crypto assets can be exceptionally risky and are often volatile he reminded people that a number of major platforms and crypto assets have become insolvent or lost

Value he also warned that fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams Gensler added that these Investments continue replete with fraud bogus coin offerings Ponzi and pyramid schemes and outright theft where a project promoter disappears with investors’s money last coinbase wants to offer crypto link

Derivatives in the European Union coinbase told CNBC exclusively on Friday that the crypto exchange entered into an agreement to buy an unnamed holding company which owns a license that would allow the crypto company to achieve its goal that license refers to the eu’s updated rules governing financial instruments which includes fixed income

And derivatives the move is part of coinbase’s long-standing go goal to serve professional and institutional customers and if it completes the deal it would Mark the first launch of derivatives trading by The Firm in the EU coinbase already offers spot trading of certain cryptocurrencies but with the

License the platform would be able to start operating regulated derivatives like Futures and options in the region the deal is subject to regulatory approval and coinbase expects it will close later this year all right back to spot Bitcoin ETFs for our main story I spoke with Ben McMillan the founder and

CIO of idx digital assets on what the impact of an approval of one of these proposals could mean for retail investors and institutions we are a few days or even a few hours away from a decision from the SEC on these potential spot Bitcoin ETFs what’s your expectations on whether the

SEC will give the go-ahead for one of these spot ETFs um and also what are your price expectations for Bitcoin in the aftermath of that decision either way yeah so I think at this point I mean we’ve seen the SEC has clearly been very deliberate with their approach to

Allowing spot Bitcoin ETFs and as such such you know so of the issuers and at this point we’ve seen a lot of back and forth the market expectation is that it’s going to hit this Wednesday the 10th I think that’s the likelihood at this point you know we we have all the

Updated s1s you know for any offering that comes to Market you know of any type of kind of 40 act fund ETF in particular there’s a lot of back and forth with the SEC so this isn’t just these issuers you know putting something out there and hoping it hits you know

They have they have good visibility and a high likelihood that this gets is allowed so I think it’d be at this point it’d be very surprising if if that were not the case and I think it is imminent I think the you know I think the market

Is right that it’s likely going to be this week so the next question is you know what does that mean for Price action um you know longer term this is this is very bullish um and I’ll get into that although I would caution investors that you know we’ve started

Seeing some bullish price action action in the last couple of weeks in anticipation of this event so you do have to be cons you know a little bit worried about the buy the rumor sell the news type of trade here now do I think the Bottom’s going to fall out no but I

I you know don’t think people should you know necessarily rush into you know Bitcoin expecting a huge bump day of um although it is Bitcoin Anything Can Happen um I think what’s more interesting however is you know really what this portends for Bitcoin and specifically the mainstreaming of

Bitcoin for the audience you know a greater audience um you know the appeal of the spot Bitcoin ETFs wasn’t so much in my mind wasn’t so much necessarily the fact that it was spot although that matters to a lot of people it was who was behind it you know the fact that

You’ve got really big names Black Rock of course you know and Fidelity being kind of the the the two poster children here you know suggests that once these B uh ETFs are allowed they’ll start to find their way into things like 401K type plans you know retirement plans you

Know all of a sudden it’s you know the idea of Bitcoin and model portfolios is going to be a lot more normalized and so I think longer term intermediate longer term this really opens up the audience of people that can invest in Bitcoin and the last thing I’ll say from kind of a

Market perspective a structural perspective is the fact that they’re owning spot is you know any dollars that come into these ETFs are going to have to buy Spot directly and so you know a lot of people are excited about that fact again from a structural perspective being a price Catalyst for Bitcoin yeah

Let’s talk about retail investors A lot’s been said about these ETFs for and their benefits for Wall Street or or for institutions but in your view what’s what’s the benefit for retail Traders buying into these products versus just buying and holding Bitcoin directly is it that the the long-term say like 401K

Replacement retirement interest there is it the stability what’s the benefit over just buying the asset itself I think the big one is just the you know this kind of the standard benefits of an ETF rapper it’s easy it can custody anywhere you know it’s for a lot of folks You

Know despite the fact that it’s relatively simple to set up a coinbase account it’s another account it’s just it’s a leap that a lot of people just aren’t going to take you know and so we saw with early Enthusiast in Bitcoins you know everybody was happy trading in

You know trading spot with you know the likes of coinbase Etc even some you know uh Financial advisors and institutions but you have to you know still custody it yourself the fact that this can you know settle in any account it’s an ETF there’s there’s a huge layer of trust

There and we saw this you know with with Bitcoin features you know people likeed that the CME was now a counterparty and you know they didn’t have to necessarily deal with custody issues themselves I think this is just you know one more huge step in that direction in terms of

Making it very easy for people to just buy it like they would any other stock in any kind of you know stock account so I think I think we will see retail money flow into this um and you know I like I said I think this is part this is the

Last really big step in kind of the mainstreaming of Bitcoin you know for a huge much bigger audience of investors I also want to talk about something that you mentioned earlier we got some new filings uh today we learned more about the fee structure for the spot ETFs it’s

Somewhere around 3% for them on average grayscale is a bit higher at at at more than 1% those are higher than say the Spy ETF that tracks the S&P 500 that fee is around1 1% do you think those higher fees are Justified given the custody

Process and so forth um are they at all a deterrent no I don’t think so for the exact reason you mentioned there is a cost of custody here it’s non-trivial anyone who’s tried to do this themselves knows that and also when you look at it

In the context of kind of smart beta or alternative asset class ETFs they’re very much in line you know frankly even a little bit cheaper than what you might see in some of the you know uh more sophisticated factor-based stuff so I don’t think the fees are going to be a

Deterrent at all in fact if anything I think we’ve see the you know you know some of the filings have suggest have shown that people are going to you know some of the issues are going to rebate fees for a certain period of time or up

To a certain amount so I think that’s signaling that they’re aggressively trying to attract you know flows specifically retail flows um you know into their into their ETFs but yeah that aside I don’t I don’t see the fees being a big stumbling block for retail or institutional in these all right that’s

All for crypto world today we’ll be back again tomorrow and we’ll see you then