Arthur Hayes, the co-founder and former CEO of BitMEX, highlighted the potential “juicy arbitrage opportunities” that would emerge for investors who trade on both American and non-American crypto exchanges due to the SEC’s insistence that applicants handle funds in a specific way.
In a Dec. 21 post on X (formerly Twitter), Hayes explained that an ETF utilizing in-kind transactions would be a simpler and cleaner option, as it wouldn’t directly influence Bitcoin trades because the asset can be sourced from anywhere.
Usually, traditional ETFs facilitate “in-kind” transactions, permitting market makers to swap the underlying asset for the ETF shares directly. In contrast, the “cash create” method necessitates issuers to exchange cash for the ETF shares in each transaction.
However, he pointed out that a cash-based ETF poses complexities because “it hands big power to the fund.”
According to Hayes, this setup could lead to potential misuse of authority by the ETFs as the
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