Expert: Premiums for Spot Bitcoin ETFs Will Be Formed

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According to Reggie Browne, co-head of trading and sales of GTS, spot Bitcoin ETFs will be priced at a noticeable premium compared to NAV (net asset value).

In an interview with Bloomberg, Browne explained that this is due to the regulatory regime in the United States, which limits the ability of institutions to conduct cash-to-customer Bitcoin transactions.

He elaborated that due to these limitations, most broker-dealers in the US will have to hedge with futures, leading to a premium in the Bitcoin ETFs, that investors will have to pay.

Browne estimated that investors may have to overpay up to 8%. However, he expressed hopes that there will still be enough liquidity to maintain competition and keep the spread narrow. Browne also stated that market makers are likely to offer favorable terms for this ETF structure.