- 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. pic.twitter.com/0z1ESHG2Vw
— 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?
— Peter Brandt (@PeterLBrandt) April 26, 2024
Judge for yourself.
It is called Exponential Decay. Read about it here.https://t.co/r1q5k9HA0n
Would love to hear your thoughts about this pic.twitter.com/ql79gqK6rc
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.