LPL Financial, the largest independent broker-dealer in the United States, is delaying its participation in the bitcoin spot ETF market while it awaits the outcome of an evaluation of the performance of new exchange-traded products (ETPs). This fact was revealed by the company's head of wealth management solutions, Robb Pettman, in bitcoin-etf-hype-for-now” target=”_blank” rel=”noopener nofollow”>an interview published by Bloomberg on January 3.
According to Pettman, LPL, which currently manages more than $1 trillion in capital, has commissioned an evaluation of bitcoin spot ETFs as they weigh the potential addition of this emerging asset class to the portfolio of offerings for their clients.
Pettman, who is leading the investigation, has said it will last three months, during which LPL will simply study how these ETFs perform in the stock market. Based on these results, LPL will decide which of the funds will be adopted on its platform or perhaps extend the evaluation period.
However, Grayscale's GBTC is currently available to LPL clients as it was originally converted from a trust structure. This represents the broker-dealer's only bitcoin spot ETF offering, as other ETFs are subject to ongoing evaluation.
A key factor in this assessment will be the amount of assets the ETFs can accumulate, as Robb Pettman states. The FPL executive expressed that the company is tired of incorporating ETPs, which attract little investment and closing, throwing losses at investors.
Pettman told Bloomberg:
This can be a very negative experience for the investor and the financial advisor. It's also incredibly expensive for a company like ours operationally to help facilitate that,
Therefore, it is important that LPL be
“Keep in mind the product that you are placing on the platform and make sure that they are durable over time, that there is a good investment thesis. That is ultimately the position we normally start from when we evaluate them,” he added.
The next obstacle
Following the approval of bitcoin spot ETFs by the SEC, sponsors of these ETPs now face the Herculean task of convincing traditional investment and brokerage institutions about the safety and profitability of these funds.
Like LPL, most of these companies will access the assets managed by these ETFs, as well as their overall market performance. Currently, BlackRock's IBIT and Fidelity's FBTC, which have net inflows of more than $3 billion and $2 billion, respectively, are the best placed candidates to attract any form of attention from these large financial players.
Overall, sponsors of various bitcoin spot ETFs remain intent on attracting more investments, as evidenced by the incentives of low trading fees. For example, issuers have now placed ETF promotions on famous digital platforms such as Google Search and YouTube, and reports indicate that they will soon extend to Facebook and Instagram.
<img decoding="async" class="aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Top-US-Brokerage-Stalls-on-Bitcoin-Spot-ETF-Commitment-Here39s" alt="bitcoin Spot ETF” width=”1479″ height=”893″/>
btc trading at $43,017 on the daily chart | Source: BTCUSDT chart on Tradingview.com
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