The decision of the US Securities and Stock Exchange Committee (SEC) had to allow “construction, salvation and redemption for the Cryptocurrency Spot Sots on this industry.
The head of BitWise Teddy Fusaro highlighted the technical aspects of this decision and explained in detail the reason for the importance of investors.
“I hear a lot of people asking,” Why is this very important? “I would like to share some technical reasons,” Fusaru said, and it explains how the current “generation of criticism” model works.
Under the current system, when ETF Bitcoin ETF receives flows, the box must buy bitcoin directly from the market. While some exporters are more active than others, each treatment bears cost. For example, Fusaro explained that the assumption that ETF purchases Bitcoin at a price of 0.02 % (two basic points) higher than the reference price, this difference represents an additional cost of $ 20,000 to buy at a value of $ 100 million.
The cost of this transaction is not imposed directly to the ETF, but on the “approved participant” (AP) that works as a mediator in the transaction. However, this cost is transferred by the AP to the market maker, and from there to the final investor. As a result, the investor is forced to buy ETF shares at a higher price due to the cost of the transaction.
Fusaro stated that with the implementation of the “eye” system, additional fees will be canceled like a cost of $ 20,000 mentioned as an example. In the new system, instead of delivering cash to buy Bitcoin, AP will provide a pre -specific amount of Bitcoin directly to ETF. This will eliminate the purchase teams higher than the reference price, or “slip”.
Fusaru concluded his remarks as follows:
“The first and most important gain is to increase efficiency and reduce costs for the final user. With this system, bitcoin will not tolerate ETF additional costs.”
*This is not an investment advice.
Source: https://en.bitcoinsistmi.com/investment-company-president-discusses-secs-historic-bitcoin-decision-yesterday-much-bigger-than-dected/
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