|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cryptocurrency News Articles
DTCC Policy Change Impacts Cryptocurrency ETFs as Collateral
Apr 28, 2024 at 11:00 am
The Depository Trust and Clearing Corporation (DTCC) has announced a new policy that will significantly impact exchange-traded funds (ETFs) with exposure to Bitcoin and other cryptocurrencies. Effective April 30, 2024, the DTCC will no longer consider these assets as eligible for collateral under its line of credit system, a move that will restrict their use in traditional financial transactions. While this decision aligns with the DTCC's conservative approach to digital assets, analysts suggest that the impact on brokerage and lending activities where cryptocurrency ETFs are used as collateral may be minimal.
Depository Trust and Clearing Corporation Announces Policy Shift Impacting Cryptocurrency-Linked ETFs
New York, April 27, 2024 - The Depository Trust and Clearing Corporation (DTCC), a pivotal institution in the financial market's clearing and settlement landscape, has unveiled a new policy directly affecting exchange-traded funds (ETFs) that invest in Bitcoin and other cryptocurrencies. Effective April 30, 2024, the DTCC will no longer recognize these assets as eligible collateral under its lending facility.
Collateral Value Reduction and Implications
This move, initially announced on April 26, signifies the DTCC's decision to implement a 100% reduction in the collateral value for such financial instruments. ETFs holding Bitcoin or other cryptocurrencies as their underlying assets will thus encounter significant limitations in their ability to be used as collateral in conventional financial transactions.
Industry Perspectives
While the DTCC's decision has raised concerns among market participants, industry experts have offered contrasting views. According to KO Kryptowaluty, a prominent cryptocurrency enthusiast, the new DTCC measures will primarily affect settlement operations between entities operating directly within the scope of the corporation's lending facility. Kryptowaluty emphasized that for brokerage and lending operations where cryptocurrency ETFs are utilized as collateral, the impact will be minimal provided brokers are willing to assume the associated risks.
Contextual Background
The Depository Trust Company (DTC), an integral component of the United States' financial infrastructure, serves as the central securities depository. The DTC operates under the umbrella of the Depository Trust & Clearing Corporation (DTCC).
Contrasting Trends in Cryptocurrency-Related Investments
The DTCC's decision stands in contrast to the broader trend witnessed in other areas of the financial sector, where interest in cryptocurrency-based products has experienced notable growth. This is evident in the recent launch of the first spot Bitcoin ETFs in the United States, which have collectively attracted over US$12.5 billion in assets under management within just three months. Data from February indicated that approximately 75% of new Bitcoin investments were channeled through 10 spot Bitcoin ETFs approved in January.
Moderating Inflows into Spot Bitcoin ETFs
Despite this initial fervor, recent data points to a slowdown in net inflows into these ETFs. As reported by Farside Investors, significant net outflows have been observed, with a particularly substantial outflow of US$218 million recorded on April 25 from spot Bitcoin ETFs in the United States.
Grayscale's Bitcoin Trust Marks Notable Outflows
Among these outflows, Grayscale's Bitcoin Trust (GBTC) stands out as a prominent case. According to data provided by Farside, GBTC experienced a single-day reduction of US$82,4197 million, contributing to total net outflows of US$17,185 billion.
Implications for the Future
The DTCC's policy shift is likely to have a notable impact on the ecosystem surrounding cryptocurrency-linked ETFs. While the short-term effects may be mitigated for some market participants, the long-term implications remain to be seen. The contrasting trends in cryptocurrency-related investments, coupled with the dynamic regulatory landscape, suggest that the market for these products will continue to evolve in the coming months and years.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
-
- BlockDAG Soars Past Helium and ApeCoin, Becomes Crypto of Choice
- May 12, 2024 at 08:00 am
- BlockDAG Emerges as the Cryptocurrency of Choice, Surpassing Helium and ApeCoin in Market Performance and Investor Confidence London, May 12, 2024 - B
-
- Unveiling the Curve DAO Token ($CRV) Airdrop: A Comprehensive Guide for Investors
- May 12, 2024 at 08:00 am
- Unveiling the Curve DAO Token ($CRV) Airdrop: A Comprehensive Guide for Investors Introduction to Curve DAO Token ($CRV) The cryptocurrency landscape
-
- Breaking News: Cardano Airdrop to Shower Free Tokens
- May 12, 2024 at 08:00 am
- Cardano Airdrop: Unlocking Free Crypto Tokens and Fueling Blockchain Innovation Introduction In the ever-evolving realm of blockchain technology, Card
-
- Maximize Your Crypto Gains: A Complete Guide to the Conflux $CFX Token Airdrop
- May 12, 2024 at 08:00 am
- Maximizing Your Rewards: A Comprehensive Guide to the Conflux $CFX Token Airdrop Introduction: A Lucrative Opportunity in the Crypto Sphere The crypto
-
- BlockDAG Soars in Crypto Universe, Unveils Low Code/No Code Platform
- May 12, 2024 at 07:56 am
- BlockDAG: A Rising Star in the Cryptocurrency Landscape Amidst the dynamic price fluctuations in the cryptocurrency market, BlockDAG has emerged as a
-
- Terra Luna Classic Soars as Billions of Tokens Vanish
- May 12, 2024 at 07:55 am
- Terra Luna Classic's Price Soars as Billions of Tokens Removed from Circulation New York, NY - In a significant development for the Terra Luna Classic
-
- Cryptocurrency Titan Warns of Biden's Devastating Impact on Industry
- May 12, 2024 at 07:52 am
- Cryptocurrency Pioneer Raises Alarm over Biden Administration's Impact on Industry Charles Hoskinson, the visionary behind the Cardano (ADA) blockchai
-
- Shiba Inu Community Warns of Urgent Scam Targeting Treat Token Holders
- May 12, 2024 at 07:51 am
- Shiba Inu Community Faces Urgent Scam Alert Amidst Ecosystem Advancements SCAM ALERT The Shiba Inu (SHIB) community is facing an urgent alert regardin
-
- Solana Memecoin WIF Bulls Charge Amidst Market Mayhem
- May 12, 2024 at 07:41 am
- Solana-Based Memecoin WIF: A Bullish Outlook Amidst Market Volatility In the ever-evolving cryptocurrency landscape, Solana-based memecoin WIF has eme