Valkyrie Counters BIS, Says Concern on Bitcoin ETF Front-Running Is Misplaced

Posted on by American Coins & Gold

Valkyrie Counters BIS, Says Concern on Bitcoin ETF Front-Running Is Misplaced
Bank for International Settlements concern over speculators exploiting the monthly rollovers of bitcoin futures-based exchange-traded funds (ETFs) from one contract to another are overdone, according to ETF manager Valkyrie.It’s recognized that the funds are exposed to contango bleed, an over time drawdown in performance due to end-of-month rollovers of long positions from expiring short-term contracts. The problem, however, can be exacerbated by speculators exploiting the monthly rollovers, according the BIS.“The predictable rebalancing behavior of the ETF may also give rise to ‘front-running’ incentives, motivating investors to purchase longer-dated bitcoin futures in anticipation of the ETF rolling into those contracts,” Bank…