Spot Bitcoin ETFs solved access, but custody, advisors and plumbing still lag, panelists say

Panelists at CoinDesk's Consensus conference in Miami acknowledged that spot Bitcoin ETFs have successfully addressed the long-standing issue of access to Bitcoin by integrating it into existing brokerage and advisor accounts. However, they identified several remaining challenges: custody concentration, with many ETFs relying heavily on Coinbase; modest uptake from financial advisors, who are hesitant due to Bitcoin's volatility and the effort required to explain small positions; and inefficiencies in the "back-office plumbing" or creation-redemption process.

Christopher Russell of Calamos Investments highlighted that despite $12.5 billion in advisor-managed assets, this represents a small fraction of the total $146 trillion in advisor AUM. Jean-Marie Mognetti of CoinShares expressed concern over the significant concentration risk posed by Coinbase being the primary custodian for many ETFs, advocating for diversification among prime brokers. While some ETFs are diversifying custodians (e.g., Fidelity Digital Assets, Anchorage Digital), Coinbase remains a central infrastructure piece.

Aaron Dimitri of Flow Traders noted that ETFs have enabled Bitcoin to be incorporated into broader portfolio construction, including yield products and structured vehicles, making its volatility easier to manage. Simeon Hyman of ProShares argued that volatility is an inherent feature of Bitcoin, not a bug, and can improve portfolio efficiency when uncorrelated with traditional assets. He also defended the continued relevance of futures-based ETFs like ProShares' BITO, which still sees significant trading volume.

The discussion also touched upon the uncertain demand backdrop, referencing MicroStrategy's potential Bitcoin sales to meet dividend obligations, which has been seen as a key demand pillar. Looking ahead, Russell predicted Bitcoin could reach $1 million in five years, albeit with a non-linear trajectory.

(Source：CoinDesk)