A tip to ETF administrators: If you want to launch an ETF, choosing an undeveloped underlying market and getting authorized participants on board is essential.

In the case of the Winklevii ETF, the Bitcoin isn't reliable enough to build an ETF upon, and authorized participants are not game to taking such a risk, Financial Times reporter Arrash Massoudi writes. That mentality, however, could extend to other ETFs in times of intense market stress, such as when Citigroup stopped accepting orders to redeem underlying assets.

There's no need to worry too much, however, Massoudi's sources say:

“I don’t think we’re ever going to have a situation where everyone just decides we don’t want to make money,” says one [authorized participant] who declined to be named.

To read more, click here.  

Edited by: Casey Quinlan


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