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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

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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)

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