American stockbroker Peter Schiff has expressed concerns regarding the challenges of trading Bitcoin through an exchange-traded fund (ETF), citing limitations in liquidity.
In a post on X published during the early hours of Wednesday, March 20, Schiff noted that holding Bitcoin (BTC) in an ETF means its asset liquidity is limited as these funds can only be traded during U.S. market hours.
According to him, customers will be frustrated and helpless during a market downturn because they cannot quickly sell their assets until the U.S. market opens for trading.
One problem with owning #Bitcoin in an ETF is that liquidity is limited to U.S. market hours. So if the market crashes overnight, you have no ability to sell until the U.S. market opens for trading in the morning. Very frustrating to watch helplessly with no ability to get out.
— Peter Schiff (@PeterSchiff) March 19, 2024
Peter Schiff’s Post on X about the challenges of trading Bitcoin via an ETF. Source: X
Schiff points out that ETF holders may encounter frustration during market downturns as they cannot swiftly liquidate their assets until U.S. trading resumes,
While responding to a comment on his post, Schiff also noted that it is much better for investors to own Bitcoin themselves rather than paying third-party firms to hold it on their behalf with limited liquidity. He contrasted Bitcoin’s volatile nature, which can result in sudden crashes, with the stability of gold, suggesting that investors might find the latter more reassuring.
In his response to another comment in his post, Schiff expressed doubts about whether advisors truly purchase ETFs for customers because of too much liability. He suggested that individual investors, rather than institutional entities, are primarily responsible for driving Bitcoin’s price surge through personal account trading.
Notably, Schiff’s comment comes a few hours after the price of Bitcoin plummeted to below $62,000, spurring a massive sell-off across the entire cryptocurrency market. Within 24 hours, Bitcoin’s market capitalization declined massively to $2.33 trillion, registering a 3.84% decline from the previous day’s value, according to CoinMarketCap data.
As of press time, Bitcoin was trading at $61,958.38, reflecting a 3.62% decrease from the previous day’s trading price.
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