Here’s how much insurance covers bitcoin ETFs
Investors viewed bitcoin spot ETFs as an opportunity to gain exposure to bitcoin’s price without having to hold bitcoin directly. Unfortunately, the initial effect was a simple reshuffle of existing bitcoin investments into ETFs, often from publicly traded bitcoin miners. Similarly, investors rotated money from GBTC, a high-fee trust, into spot ETFs with far lower fees. However, as awareness of these ETFs has proliferated and the price of bitcoin has rallied to all-time highs, net new inflows into bitcoin ETFs have become a reality. There is over $50 billion now in bitcoin ETFs. One natural question, given the size of the custodial bitcoin market, is whether bitcoin ETFs are insured. BlockFi, Celsius, Gemini, QuadrigaCX, and FTX have spooked depositors with victims of these collapsed platforms understandably wary of third parties holding bitcoin on their behalf. Celsius, in particular, once claimed it passed along depository insurance from the FDIC — a federal insurance progra...