Arthur Hayes: The adoption of a cash subscription mechanism for spot Bitcoin ETFs will bring new arbitrage opportunities

Arthur Hayes, co-founder of BitMEX, posted on the In-kind is simpler for funds because the fund does not have to direct the trading of BTC, but it means that BTC can be obtained from anywhere. Cash is more complex, but it gives the fund a lot of power. The fund trading department will have great power to direct large BTC transaction flows. It is likely that only politically connected brokers and exchanges will be used as counterparties to buy and sell Bitcoin for the fund. It will be interesting to see how the market microstructure changes. Will price discovery shift from East to West? Is the most important trading time Monday through Friday when the subscription/redemption window closes at 4pm ET? This will provide lucrative arbitrage opportunities for those who can trade on U.S. and non-U.S. Bitcoin exchanges. "