3 Disadvantages of Spot Exchange-Trust Funds (ETFs) Approval

Coin Edition
Coin Edition

21 Nov 2023 6:35 PM

Dan Hoover identified a lack of transparency, unclear governance, and market concentration as the potential disadvantages of spot ETFs. Read more....

  • Dan Hoover, Castle Analytics Chief Compliance Officer, identified three cons of spot ETFs: lack of transparency, unclear governance, and market concentration.
  • Crypto ETFs make it easier to build potentially market-moving positions off-chain without transparency.
  • Settlement times for ETFs need to be clarified, as they differ from digital assets transactions.
  • Traditional proxy voting and corporate governance models for ETF managers need to be adapted to the crypto consensus.
  • There is a potential imbalance in market concentration due to reliance on Coinbase and cash-creation of new ETF shares.

The sentiment of the article is mostly negative, as it highlights the potential cons and setbacks of spot ETFs in the crypto industry. The lack of transparency, unclear governance, and market concentration are seen as disadvantages that could harm the ecosystem.

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