To bitcoin ETF or not to bitcoin ETF?
To bitcoin ETF or not to bitcoin ETF?
Investment manager VanEck’s bitcoin futures ETF (XBTF) began trading on the Chicago-based CBOE exchange today.
VanEck pushed through after facing rejection from the SEC on a proposal for a “spot bitcoin ETF” a.k.a one that invests directly in bitcoin rather than futures contracts.
Obviously, a physically-backed bitcoin ETF remains the goal, but VanEck is doing what it can to give the people what they want.
Plus, there could be gains → When ProShares’ bitcoin futures product (BITO) started trading last month, it saw 24 million shares traded (the second-biggest ETF debut in history).
Futures vs. Spot ETF
Asset manager Bitwise, on the other hand, withdrew its application to list a bitcoin futures ETF, but their *spot* filing remains. Bitwise CIO Matt Hougan explained how the futures ETF is too costly in a Twitter thread.
TL;DR: While a futures ETF offers many advantages to traders, the opening of a spot ETF will be what increases institutional investment and, in turn, mass adoption.
Mr. Wonderful won’t bitcoin ETF
Buzz around a bitcoin ETF spurred me to sit down with Kevin O’Leary (at NYC SALT conference) so he could explain why:
- Fees → “It’s like paying for storage on something you don’t have to pay storage for — you could just have your own wallet, buy your own coin and own it without any fees whatsoever.”
- Regulation → “We’re a couple of years away from that [spot] bitcoin ETF. I don’t think it’s coming next year.”
- Trading → “I treat bitcoin like real estate. I buy it, I don’t trade it, I just hold it and look for the price to appreciate over time.”
- ESG → “I cannot breach compliance on ESG — sustainability matters. I don’t like the idea of burning coal. I’m never going to use an ETF because I have no idea what’s inside it.”
Yieldstreet bets on physical over digital art
Yieldstreet launched a fund to let retail investors buy into a portfolio of artworks by major post-war and contemporary artists 👩🎨
Turns out, the demand for owning physical art by artists like Jean-Michel Basquiat, Francis Bacon, Mark Rothko, and Andy Warhol is soaring.
No NFTs here, people.
What their CEO told me:
I caught up with Milind Mehere who explained that alts are not only here to stay, but will drive alpha in the coming decade.
Why? Access to and distribution of alternatives is fundamentally broken because most people don’t have access to what is a very lucrative asset class. Thus, creating an income and opportunity gap.
That’s why Milind started Yieldstreet.
Fast-forward five years since Yieldstreet started, the platform has grown to more than 320,000 investors and $2.4 billion worth of alternative investments.
Fun fact: There’s a Keith Haring piece that Milind might have his 👀 on
Why it Matters:
Remember last week when I wrote that alt investing fintechs like this are blowing up?
For decades, investors have put their financial future in the hands of ol’ reliable: the 60/40 rule. Fintechs today are saying RIP to traditional allocations and embracing diversification.
For the industry, I expect to see more collaborations as fintechs aim to quickly provide users with what’s in demand. For example, fintech giant Envestnet partnered with UBS and iCapital Network to launch an Alternatives Exchange so more financial advisers could offer alts.
TL;DR: Technology comes into the picture to fractionalize alternatives and make them an affordable investment. Every investment-based fintech is going to have to offer alts to keep up with the competition.
Apple takes and it takes and it takes
There’s not a lot about Apple that surprises me these days, but the decision to have taxpayers foot part of the bill in the company’s rollout of a digital ID was news too loud to ignore.
Jason Mikula of Fintech Business Weekly breaks down why building an identity verification service would be a lucrative revenue stream for Apple in his fantastic deep dive into the story.
- What’s getting most people *shook* is the level of control Apple is aiming to have over state DMVs (including things like sole responsibility for designating what devices can use a digital ID)
- ID verification is a lucrative business (worth ~ $7.6B in 2020) with more companies like Apple looking to cash in
- There’s a lack of requirements and transparency in the deal
- Apple somehow gains full control without providing any compensation to state agencies (i.e. taxpayers will pay for this, yet Apple gets the $)
The paragraph that really hits home:
“The more obvious risk is handing more data and control to what is already one of the most valuable, powerful companies on the planet — one that has a history of leveraging its market power in anti-competitive ways that enrich itself while disadvantaging other businesses and, by extension, consumers.”
For me, what else is notable is how much we consumers value increased convenience over privacy. That demand has spurred Apple to do what it does.
Open your eyes: Women in fintech are here
I’m a firm believer that representation is power and the most innovative companies have WoC in the decision-making room. Period.
Last week I shared the not-so-shocking yet disappointing stats around women representation in global fintech. Then, I saw this amazing blog post by Michelle Dhansinghani saying enough is enough. It’s time to stop saying there’s “not” and start highlighting what is true: WoC in fintech are here.
And while we’re here, let’s set the record straight: Research shows that women-led fintechs generate a higher revenue than men-led fintechs.
Why? Because women have to face more challenges to actually get funding. So when a woman does, you better believe she is fighting tooth and nail for success.