■The DTCC issued an important notice announcing 100% haircut for ETFs and investment vehicles that include Bitcoin.
■No collateral value meaning the financial services company will provide no loans against investments in ETFs, Bitcoin.
■Crypto expert says Bitcoin could face selling pressure if small banks facilitating investments in ETFs drop their holdings.
The Depository Trust and Clearing Corporation (DTCC) is a US financial services company that provides clearing and settlement services. The DTCC issued a notice on Friday, April 26, informing all participants that ETF or investment vehicle that includes Bitcoin or any other cryptocurrency will be subject to a 100% haircut.
Bitcoin investments receive 100% haircut according to DTCC notice
The DTCC’s notice states that no collateral value will be given for ETF or other vehicles that include Bitcoin or other cryptocurrencies as an underlying investment and they will be subject a 100% haircut. This means the financial services company will extend no loans on these investments.
Crypto analyst behind the X handle KO_Kryptowaluty says that the notice applies only to the inter-entity settlement in the Line of Credit (LOC) system. The system serves as a tool that meets market participants' liquidity requirements.
ETFs can still find their role in lending and as a collateral in brokerage activities subject to the risk tolerance of individual brokers.
Crypto analyst @HodlMagoo says that there might be a liquidity issue “around the corner.” In a video, the analyst behind the X handle @OTC_Bitcoin explains that the DTCC’s move could result in banks that support ETFs and cryptocurrencies selling their holdings or reducing exposure for corporate bonds, rated B1 to B3 or other securities.
Here's what this means for Bitcoin holders. The federal reserve, the fractional banking system, and the SEC including recent first Republic Bank closure explained.
— Follow. #1 in Binance Leaderboard $pltr $tsla (@OTC_Bitcoin) April 27, 2024
Bitcoin price is $62,933 at the time of writing and the price wiped out 1.31% of its value in the past day. Legendary trader Peter Brandt recently shared his thesis on Bitcoin’s Exponential Decay and stated that it is likely that the cycle top is in.
Does history make a case that Bitcoin has topped?
Judge for yourself.
It is called Exponential Decay. Read about it here.
Would love to hear your thoughts about this pic.
— Peter Brandt (@PeterLBrandt) April 26, 2024
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
