Crypto
The spot bitcoin ETF: Here's what happens when it starts trading
Representations of cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken June 16, 2023.
Dado Ruvic | Reuters
Crypto investors are waiting for the Securities and Exchange Commission to approve a raft of spot bitcoin applications, likely Wednesday
With a spot bitcoin ETF now looking very real, attention is turning to the details of how it will trade, how much it will cost, how much of the runup in bitcoin is due to demand that has been pulled forward, and premium or discount valuations.
Fees are competitive and will get more so
With nearly a dozen ETFs competing for attention, bitcoin buyers will be very price sensitive, and issuers are already engaged in a modest price war. For example, Cathie Wood’s ARK Invest, which is partnering with 21Shares to launch a bitcoin ETF, initially announced a fee of 0.8% but on Monday announced no fee for the first six months.
Other issuers are also steeply discounting prices, with several (Bitwise, ARK, Invesco) offering 0% fee for the first six months, while Grayscale is charging 1.5%.
Spot bitcoin ETF fees
Bitwise (GBTC) 0.0% (after first six months: 0.24%)
ARK Invest/21Shares (ARKB): 0.0% (after first six months: 0.25%)
Invesco Galaxy Bitcoin ETF (BTCO) 0.0% (after first six months: 0.59%)
iShares Bitcoin Trust (IBIT) 0.20% (after first 12 months: 0.30%)
VanEck Bitcoin Trust (HODL) 0.25%
Franklin Templeton Digital Holdings Trust 0.29%
Fidelity Wise Origin Bitcoin Trust (FBTC) 0.39%
WisdomTree Bitcoin Trust (BTCW) 0.50%
Valkyrie Bitcoin Fund (BTF) 0.80%
Grayscale Bitcoin Trust (GBTC) 1.50%
Invesco’s Galaxy Bitcoin ETF has set its expense ratio at 0.0% for the initial six months and the first $5 billion in assets, and goes to 0.59% after.
How will a spot bitcoin trade relative to bitcoin and bitcoin futures?
One of the main questions is how well a spot bitcoin ETF will track bitcoin and bitcoin futures.
Simeon Hyman, ProShares’ global investment strategist who manages the largest bitcoin futures ETF, the ProShares Bitcoin Strategy ETF (BITO) that launched in October 2021, noted that bitcoin futures ETFs have tracked bitcoin “fairly well.” But he also told me, “The spot market for bitcoin is still not mature. The futures market is regulated and mature. We’ll have to wait and see how well they track against each other.”
Another issue is whether the bitcoin ETFs will trade at a premium or discount to their net asset value. In this case, the NAV is the value of the bitcoin owned by the ETF. Some are concerned that the creation and redemption process that was agreed upon to create spot bitcoin ETFs could result in a bitcoin ETF trading at a premium to its NAV.
“Some of these ETFs will trade at a premium, and then as investors start to understand the nuances, that’s when we will filter out the nuances and the small points,” Reggie Brown, GTS co-Global Head of ETF Trading & Sales, told Bloomberg.
Most market participants believe that any premiums will be small.
Som Seif runs the Purpose Bitcoin ETF, the first bitcoin ETF to launch in Canada in 2021.
“Our product trades extremely efficiently, with very tight spreads,” Seif told me. “You should see no impact on trading efficiency. There will be a breadth of players, and the underlying asset is very liquid.”
Matt Hougan, CIO of Bitwise Asset Management, one of the applicants for a bitcoin ETF, agreed: “The underlying market is very liquid,” he told me. “We have been in the market buying and selling bitcoin for years. The main issue are, who gets the liquidity, and who wins on expenses.”
How much money will these ETFs attract?
It’s not clear how much new money will be dragged in once a spot bitcoin ETF trades.
However, two ETF-related events have helped propel interest in bitcoin in the last two years:
1) The beginning in trading of bitcoin futures ETFs (BITO), starting in October 2021, which helped move bitcoin from almost $10,000 in October of that year to over $40,000 by January 2022. The largest bitcoin futures ETF, ProShares bitcoin Strategy ETF (BITO), recently passed $2 billion in assets under management, according to ProShares.
2) Blackrock’s application for a bitcoin ETF on June 16, 2023, helped moved bitcoin from roughly $25,000 to $30,000 in a matter of days.
Brown estimated that the combined ETFs could have fairly significant inflows. “Thirty days out, it could be $2 billion-$3 billion,” he told Bloomberg, estimating it could attract $10-$20 billion in new assets this year.
Still, considering the current market capitalization of bitcoin is near $900 billion, that is not huge inflows. The Canadian spot bitcoin ETF, the Purpose Bitcoin ETF, has about $400 million in assets after over two years.
What’s next?
The next issue, Hougan says, is whether the big institutions and financial advisors will allow their investors to trade bitcoin on their platforms.
“Just because a bitcoin ETF has been launched, it doesn’t mean JP Morgan will get in,” Hougan said.
After that, Hougan said the next big events will be the bitcoin halving in April, followed by any interest rate cuts from the Federal Reserve.
“Higher interest rates are bad for non-yielding assets like bitcoin or gold,” he told me. “If you get 5% on cash, that’s tough competition.”
Kraken Valued at $13 Billion After Deutsche Börse Stake
Deutsche Börse has taken a minority stake in crypto exchange Kraken, marking one of the clearest signs yet of Europe’s largest market operator deepening its exposure to digital assets.
The German exchange group said it invested $200 million in Payward, Kraken’s parent company, securing roughly a 1.5% fully diluted ownership. The transaction values Kraken at about $13.3 billion, according to reporting by Bloomberg.
The move builds on an existing relationship between the two firms and signals a broader push to integrate traditional financial infrastructure with crypto markets. The partnership is expected to focus on regulated offerings, including tokenized assets and derivatives, while improving liquidity for institutional clients.
As part of the collaboration, Kraken will integrate with 360T, Deutsche Börse’s foreign exchange trading platform. The connection is designed to provide Kraken users with access to bank-grade foreign exchange liquidity, potentially streamlining the conversion between fiat currencies and digital assets.
The companies also plan to expand the use of Kraken Embed, a service that allows institutions to offer crypto trading and custody under their own brands. The initiative targets banks, fintech firms, and asset managers seeking to enter the digital asset space without building infrastructure from scratch.
Further developments are expected, subject to regulatory approval. These include enabling trading of derivatives listed on Eurex, Deutsche Börse’s derivatives exchange, through Kraken’s platform.
The investment underscores a growing convergence between established financial institutions and the crypto sector. For Kraken, the backing from Deutsche Börse provides capital and strategic alignment with one of Europe’s most influential financial market operators. For Deutsche Börse, the stake offers a direct foothold in a global crypto platform at a time when competition for digital asset infrastructure is intensifying.
The deal also reflects a broader trend of legacy financial firms moving beyond exploratory partnerships toward equity investments in crypto companies. By combining trading, custody, and tokenization capabilities, both firms are positioning themselves to capture a larger share of institutional flows into digital assets.
Key Takeaways:
- Alameda moved $16 million worth of SOL to a wallet linked with repayment efforts, signaling ongoing FTX creditor payouts.
- Alameda still holds 3.5 million SOL ($294 million), meaning supply overhang may impact solana markets.
- FTX-era asset releases since 2022 suggest continued distributions could shape liquidity next.
Alameda Unstakes SOL, Signals Ongoing Creditor Distributions
Alameda Research has transferred roughly $16 million worth of solana ( SOL) tokens after unstaking the assets, in a move that points to continued creditor repayments tied to the collapse of FTX.
Blockchain data tracked by Arkham Intelligence shows the tokens were sent to an address previously associated with distribution efforts. The transaction follows a similar pattern observed in recent months, where unstaked assets were routed to wallets linked to reimbursing creditors.
While there has been no official confirmation that the latest transfer will be distributed immediately, the repetition of this process suggests it forms part of a structured repayment strategy rather than a one-off movement.
Unstaking allows previously locked tokens in proof-of- stake networks to be withdrawn and made liquid. In this case, it enables Alameda to free up assets that can be redirected toward obligations stemming from FTX’s bankruptcy proceedings.
The latest transfer comes about a month after a comparable transaction, when Alameda moved a similar tranche of SOL to the same destination address. That earlier move reinforced expectations that such transfers are tied to ongoing creditor payouts.
Despite the asset sales, Alameda retains a substantial position in solana. The firm still holds approximately 3.5 million SOL, valued at around $294 million, according to Arkham data.
Solana remains one of the largest digital assets by market value, with a capitalization of about $47 billion. The token has traded near $82 in recent sessions, significantly below its peak of $293 reached early last year.
Alameda, founded in 2017 by Sam Bankman-Fried, was once a dominant trading firm in the crypto market. It played a central role in providing liquidity across exchanges and operated extensively in spot and derivatives markets.
Its fortunes shifted dramatically following the collapse of FTX in late 2022, which triggered a wave of insolvencies and legal proceedings. Since then, asset recovery and creditor repayment have been central to the restructuring process.
The steady movement of funds such as SOL highlights the scale and complexity of unwinding Alameda’s positions. Each transfer offers a signal, albeit indirect, of progress in returning value to creditors.
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