DTCC to Refrain from Offering Loans to Investment Vehicles with Cryptocurrency Exposure

The Depository Trust and Clearing Corporation (DTCC) has recently made a move that could indirectly impact Bitcoin spot ETF products. 

Known for providing post-trade clearing and settlement services in the financial markets, DTCC acts as a middleman for the behind-the-scenes settlement of ETF products without imposing a hefty financial burden. 

Effective from 30 April 2024, DTCC has announced that it will no longer offer collateral or extend loans against ETFs with exposure to Bitcoin or other cryptocurrencies.

The recent decision by #DTCC is causing quite a stir! No collateral for ETFs involving #Bitcoin or other #crypto!? What does this mean? 😮

Could this signal that many crypto assets hold no value as collateral? Intriguing! 🧐

Are financial institutions overly leveraged?! Fascinating discussion! pic.twitter.com/rljHbxnVre

— TheJNelsonWay (@thejnelsonway) April 27, 2024

This decision may not directly impact individual traders, but it could result in decreased liquidity and heightened risk within the market. On the flip side, it may deter larger fund managers from leveraging their crypto assets excessively, potentially reducing the risk of market manipulation due to their substantial holdings.

ETH ETF Debut on DTCC 

Just recently, DTCC featured Franklin Templeton’s proposed Ethereum spot ETF product on its platform. The listing of the ETH ETF on DTCC was widely viewed as a bullish move for the Ethereum market. 

It’s important to note that the listing of an ETF on DTCC does not guarantee regulatory approval from the relevant authorities.

In light of the escalating legal battle between the US SEC and Ethereum, it appears that the SEC is hesitant to greenlight ETH spot ETF applications.

Ethereum (ETH) Price Update 

Currently, Ethereum is trading at $3,312, marking a 6% increase in the last 24 hours.

This uptick in Ethereum’s trading price reflects a resurgence of bullish sentiments towards cryptocurrencies.