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