How a spot Bitcoin ETF could transform the industry

Dave Weisberger, CEO, CoinRoutes joined TheStreet to discuss why a spot Bitcoin ETF could be massive for the crypto industry.

Transcript

00:00 From where you sit, Dave, is a spot Bitcoin ETF truly the holy grail that many have made it out

00:06 to be? Because I've heard arguments from many people who say, look, at this point of Bitcoin's

00:10 evolution, if you wanted in on the action, you figured out a way to do it. And that could be

00:14 either sort of a future looking ETF. It could be direct tokenization. It could be trading on

00:19 a platform like Robinhood that, you know, you don't actually own the asset, but you kind of trade

00:25 along with how it's actually traded in real markets. Or is this, as some people have said,

00:30 hey, this is the big one. This is the big kahuna. It will legitimize the space and bring us into a

00:34 whole new era. I think the answer is in between. I think it is a very big deal because it opens

00:41 up the asset class to multiple constituencies which have trillions of dollars at their disposal

00:49 that have no access to the Bitcoin right now. And it also will dramatically lower costs for people

00:56 who want to be in Bitcoin for periods of time. Let me explain. If you're a registered investment

01:02 advisor, a financial advisor, or you operate a pension fund, for the most part, you are not able

01:09 to buy something and sell it, a financial asset, if it's not either an equity or a bond listed on

01:15 an exchange, etc. Most of the investment covenants are set up that way. A futures-based ETF dramatically

01:21 underperforms. That's the actual tragedy here. The futures ETFs are trailing the performance of

01:27 a honing Bitcoin spot or what a spot ETF would do because of the cost of rolling futures that's

01:33 inherent in that. And many of them are considered unsuitable for a lot of the people who might want

01:38 to invest in Bitcoin. So there's a lot of potential money out there. My brother's a financial advisor

01:43 and he's told me this. He cannot put investors into Bitcoin as part of a portfolio. So there is

01:49 a big amount of the population of money, etc. that really has no access to being able to buy Bitcoin.

01:57 This will open up. In terms of legitimization, it's also an important signal in terms of the ability

02:03 for people sometimes want to buy what's called a 60/40 portfolio. It really isn't 60/40. But your

02:09 basic portfolio allocation of some percentage equities, some percentage bonds, some in precious

02:15 metals, etc. Bitcoin isn't in that conversation when it probably should be. And this will make

02:21 that dramatically easier. And the flip side to it is cost. Right now, the crypto industry,

02:28 most people would say is predominantly retail-led, which is amusing when you consider the costs.

02:33 Because to trade retail platforms for crypto, it's very expensive. Buying Bitcoin on Coinbase

02:40 as a very small retail investor could cost upwards of 2%. Buying it on most crypto-native platforms,

02:47 it's still around 1%. You're going to be able to buy a Bitcoin ETF with a management fee of less

02:53 than half a percent in all likelihood at a spread that's in the single digit or low single digit

02:59 basis points. I mean, fractions of a percent and do it for free. So effectively, there's major

03:05 reason to believe that a Bitcoin ETF will open up the, I won't call it floodgates, but access

03:13 to a much larger segment of the investing public.

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