00:00 Speaker A
Todd, I I want to switch gears and ask you a sort of plumbing question, if you will. Um, and it has to do with Bitcoin and the Bitcoin ETFs, because something that we’ve noticed, and this isn’t unique to Bitcoin ETFs, it’s just one example that we were looking at, is that the ETF does not always trade exactly in tandem with the underlying asset. And in this case, we looked at Ibit, which is the biggest um, spot Bitcoin ETF, the BlackRock one, versus underlying Bitcoin. And you see they don’t always trade like neck- and-neck. What what explains this and what do investors need to know about it?
00:44 Todd
Right. So when you’re buying an ETF, you’re paying a price uh that the market is willing to both buy and sell and meet in the middle for as opposed to the net asset value. So typically that there’s a little bit of a deviation between uh an ETF’s price and net asset value if it’s based on underlying securities and whether the market is getting ahead uh of where the ETF is or vice versa. When there’s a spot security like Bitcoin or gold, you’ll see some differences. Many people are still embracing Ibit, you’ve mentioned it. It’s the largest. It’s going to cross $100 billion real soon in overall assets. It’ll be the fastest one to be able to do that. We’ve seen strong interest in Bitcoin ETFs, getting spot exposure as well as options-based strategies. So Calamos has rolled out uh some options-based downside protection ETFs. Neos has an ETF BTCI that offers a covered call strategy. The ETF industry has benefited from having Bitcoin exposure available to many investors.
01:50 Speaker A
And so it sounds like the sort of, you know, minor discrepancies between the two is not a a, you know, it’s not something that investors need to be concerned about.
02:02 Todd
I don’t think so. I think if you’re buying the ETF, you’re choosing to do so because of the benefits of an ETF. that you can trade it uh intraday, you have the liquidity that it fits into the rest of your portfolio. It isn’t always the same thing as getting direct exposure. So if what you want is to follow the price of Bitcoin, you might want to do that outside of the ETF wrapper, but if you want to have Bitcoin within your broadly diversified portfolio, a Bitcoin ETF, options or not using options, is a great way in my opinion.