The Bitcoin spot market, where the cryptocurrency is traded for immediate delivery, still suffers from some flaws, such as price inconsistency and platform vulnerability, according to Simeon Hyman, a global investment strategist at ProShares.
Hyman made his remarks on Bloomberg TV on Wednesday, contrasting the Bitcoin spot market with the Bitcoin futures market, where the cryptocurrency is traded for delivery at a later date. He said that while the futures market relies on a blend of prices from different sources for daily settlement, the spot market has multiple prices depending on the exchange.
He also questioned how the cash creation and redemption process would work for a spot Bitcoin exchange-traded fund (ETF), allowing investors to gain exposure to the cryptocurrency without holding it directly. Unlike most ETFs, which use the in-kind mechanism where broker-dealers exchange the underlying asset with the issuer, a spot Bitcoin ETF would use cash instead.
Hyman praised the BTC futures market as a “mature and liquid and regulated place”, but described the spot market as “still a little, let’s call it, weird”. He mentioned some of the leading crypto exchanges, such as FTX and Binance, as well as the “shaggy hair guy in the news”, referring to Sam Bankman-Fried, the CEO of FTX.
Bitcoin Price Movement
Bitcoin, the world’s largest digital asset by market capitalization, dropped 2.96% on Thursday to $$43,263, reversing its earlier gains. The price movement was influenced by the anticipation of the SEC’s verdict on the spot Bitcoin ETFs, as well as other factors such as regulatory developments, institutional adoption, and market sentiment.
BTC is making a bearish pennant pattern, indicating further down in price in the coming days. BTC crossed the $45000 price level in the last few days after a long period of 21 months. Despite the fluctuations, many analysts and investors remain bullish on the long-term prospects of BTC in 2024.
Related Reading | Crypto Risks Prompt EU Bank Regulator To Probe Non-Bank Links