📰 Table Of Contents
DTCC’s Decision on Cryptocurrency ETFs
The Depository Trust and Clearing Corporation (DTCC) has announced that it will not assign any collateral value to exchange-traded funds (ETFs) with exposure to Bitcoin or cryptocurrencies. This decision, effective from April 30, will impact various financial activities.
Impact on Inter-Entity Settlements
DTCC’s move will primarily affect inter-entity settlements within the line of credit system. Despite this change, individual brokers may still use cryptocurrency ETFs for lending and collateral, depending on their risk tolerance.
Traditional Players’ Approach to Crypto ETFs
While the DTCC has taken a firm stance against crypto ETFs, other players like Goldman Sachs have reentered the cryptocurrency market in 2024. This resurgence follows the approval of spot Bitcoin ETFs, driving increased institutional interest in these products.
Performance of U.S.-Based Bitcoin ETFs
- Within three months of launch, U.S.-based Bitcoin ETFs have amassed over $12.5 billion in assets under management.
- 75% of new Bitcoin investments in February were attributed to the 10 spot Bitcoin ETFs approved on January 11.
- Recent data shows a slowdown in net inflows, with significant outflows reported by multiple issuers.
Morgan Stanley’s Involvement with Bitcoin ETFs
Morgan Stanley is considering expanding its sales of Bitcoin ETFs by allowing its brokers to actively recommend these products to customers. This potential move aims to broaden the customer base but may also increase liability for the firm.
Industry Trends and Hong Kong’s Initiatives
While some financial institutions have reservations about cryptocurrency products, others like LPL Financial are evaluating Bitcoin funds for customer offerings. In contrast, Hong Kong is set to launch spot Bitcoin and Ethereum ETFs by the end of April to establish itself as a hub for digital assets.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
