Live on Bloomberg TV

00:00ERIC WHO COVERS EVERYTHING ETF FOR US. RIGHT NOW, THE LATEST IN THIS TIMELINE IS THE SEC IS SET TO APPROVE OR NOT, A BITCOIN ETF. TALK TO US ABOUT THE STATES OF THIS APPROVAL. ERIC: BITCOIN -- IT IS HUGE. WHEN THE MARKET OPENS UP, IT MEANS A PORTAL. GETTING BITCOIN IS NOT EASY FOR THE AVERAGE PERSON. HOW MANY AVERAGE PEOPLE WANT BITCOIN? THE STAKES ARE INTERESTING. BITCOIN IS THIS HOT NEW CURRENCY , A CRYPTO CURRENCY WITH A LOT OF MEDIA AROUND IT. THE ODDS FOR AND AGAINST IT IS EVENLY MATCHED. THERE ARE POSSIBLE REGULATIONS, IT IS NOT THAT LIQUID, SECURITY ISSUES. IT HAD A LONG HISTORY OF OPENING THESE MARKETS. A GREAT EXAMPLE IS THE CHINA A SHARES WHICH WAS APPROVED BEFORE ANY U.S. HAD A QUOTA. IT IS AN OVERNIGHT MARKET AND IT WAS SOMETHING THAT WOULD HAVE LIQUIDITY ISSUES. THAT DID FINE. IF YOU LOOK AT BOND DTS, THIS WOULD BE -- IF YOU LOOK AT BOND ETF, THIS WOULD BE ANOTHER -- IT IS AN OVER-THE-COUNTER PRODUCT THAT HAS 100% PREMIUMS. AN ETF IS THE BEST POSSIBLE SHOT FOR STRUCTURE TO KEEP PREMIUMS DOWN AND GIVE THE RETAIL INVESTOR A FAIR DEAL. DO YOU WANT TO GIVE THE RETAIL INVESTOR A FAIR DEAL? JULIE: WHEN IS THE SEC GOING TO DECIDE TO APPROVE IT? ERIC: IT WILL HAPPEN ON MARCH 11, THAT WOULD BE THE DATE. THE ODDS OF APPROVAL ARE ABOUT 50%. IF YOU LOOK AT THE APPROVAL, YOU CAN BET BITCOIN ON THE BITCOIN EXCHANGE OF WHETHER THE BITCOIN BE APPROVED. THAT IS THE MOST MENACING THING I EVER HEARD. [LAUGHTER] IT WAS 33%, WENT UP TO 70. 50 WILL BE A GOOD GUESS. JULIE: WHAT IS IN THE BITCOIN ETF? ISN'T IT GOING TO BE AN EXPENSIVE ETF BECAUSE OF THE LABOR INVOLVED IN MINING THESE THINGS? ERIC: WE DO NOT KNOW THE FEE YET. LET'S JUST SAY IT IS 50 BASIS POINTS. YOUR QUESTION WOULD BE HOW MUCH WOULD BE BEFORE A MARKET MAKER CAN ARBITRAGE IT? IT MAY TRADE AT A PREMIUM OF 1% OR 2%, WHICH IS BETTER THAN THE OVER-THE-COUNTER MARKET? WE DO NOT KNOW. THESE OF THE UNKNOWNS, BUT THE NATURAL ARBITRAGE THAT ETF ALLOW WILL KEEP THE PREMIUM AS CLOSE

No schedule data available.

Place Your Bet on Whether the SEC Approves a Bitcoin ETF

Bloomberg Intelligence’s Eric Balchunas discusses the possibility of the Securities and Exchange Commission approving a bitcoin ETF. He speaks with Julie Hyman on “Bloomberg Markets.” (Source: Bloomberg)

More From Bloomberg Markets
All episodes and clips

QuickTake
Explaining the world with Bloomberg News
More episodes and clips