While the approval of spot Bitcoin ETFs is eagerly anticipated in the United States, some are raising concerns regarding the transparency and verification of the underlying asset.
In the United States, the likely approval of spot Bitcoin ETFs is dominating the schedules of all financial television broadcasts. Despite the enthusiasm, some are beginning to focus on the actual transparency of such ETFs. Samson Mow, CEO of Jan3, has speculated that some issuers may choose to disclose their on-chain addresses to prove themselves more reliable and transparent than competitors, with the goal of attracting more clients.
Mow argues that displaying the on-chain balance of owned bitcoin is the ideal solution to ensure transparency of the ETF funds. However, at the moment, none of the current 14 candidates has decided to reveal their on-chain addresses.
Doubts about the reserves of the ETFs
Some figures in the Bitcoin industry are beginning to harbor increasing distrust regarding the reserves of spot ETFs, primarily due to concerns about the potential issuance of millions of ‘paper’ BTC, thereby boosting ETF share sales without acquiring actual bitcoin as the underlying asset. Eric Balchunas, an analyst at Bloomberg, emphasizes that it is in the issuers’ interest to own real bitcoin to maintain their reputation and credibility.
Leah Wald, CEO and co-founder of Valkyrie, suggests that investors can verify whether the ETF issuer actually possesses the declared bitcoin by examining the public records of the ETF provider, similar to the verification process for a stock ETF.
