So I think we have our answer on why the /spot ETFs were actually approved.
Because the futures contracts are not settled in bitcoin, but cash, and the etfs are similar, the cash and carry trade is happening there. So the cash and carry trade is 💯 on, but I believe it goes further.
The ETFs allow for spot price manipulation. As the ETF is the long position in the trade, and be because they’re actually backing it with bitcoin and the bitcoin sells/purchases happen with a lag, it seems the cash and carry traders can actually liquidate large amounts of the ETF, wait for the spot price to move downward, and then re enter the long side of their position at a lower level to ensure they can still capture the spread.
The larger the ETFs grow, the more difficult it will be for a third party to catch them offsides with an unexpected spot purchase.
Tortuga
npub1e3m…qvr5
2024-06-08 20:47:58
in reply to nevent1q…lg2x
Author Public Key
npub1e3mx09yq53gyh9368qyuhfstgk8t7p5vvfcnvgwa4994y7rqg37s20qvr5Published at
2024-06-08 20:47:58Event JSON
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"content": "So I think we have our answer on why the /spot ETFs were actually approved. \n\nBecause the futures contracts are not settled in bitcoin, but cash, and the etfs are similar, the cash and carry trade is happening there. So the cash and carry trade is 💯 on, but I believe it goes further. \n\nThe ETFs allow for spot price manipulation. As the ETF is the long position in the trade, and be because they’re actually backing it with bitcoin and the bitcoin sells/purchases happen with a lag, it seems the cash and carry traders can actually liquidate large amounts of the ETF, wait for the spot price to move downward, and then re enter the long side of their position at a lower level to ensure they can still capture the spread. \n\nThe larger the ETFs grow, the more difficult it will be for a third party to catch them offsides with an unexpected spot purchase.",
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