According to an industry expert, issuers of potential spot Bitcoin exchange-traded funds (ETFs) might eventually be compelled to disclose their Bitcoin addresses to remain competitive with other companies. Jan3 CEO Samson Mow suggests that providing verifiable on-chain data of Bitcoin reserves will be the best option for spot Bitcoin ETF issuers to ensure the security of their assets.
During an interview on December 28, Mow revealed that none of the current 14 applicants had undertaken any such initiative. Some market experts have expressed skepticism about the underlying assets of a spot Bitcoin ETF, with some executives warning that it could potentially create millions of Bitcoins.
Experts like Bloomberg ETF analyst Eric Balchunas have stated that holding spot Bitcoin would benefit ETF issuers, as failing to do so could lead to a loss of reputation and trust. Valkyrie’s co-founder and CEO Leah Wald believes that investors will be able to verify whether spot Bitcoin ETF issuers actually hold Bitcoin by regularly checking public records.
Wald commented that verifying ownership of stock shares claimed by a stock ETF should be no different from confirming ownership of the actual stocks. More technically inclined Bitcoin investors can also examine on-chain and off-chain fund flows, she added.
Skeptics questioning the underlying assets of a spot Bitcoin ETF product have argued that such assets cannot be verified until issuers provide proof within the ecosystem. Amidst these discussions, some spot Bitcoin ETF applicants like Grayscale Investments have previously declined to disclose addresses, citing security concerns. Grayscale officials stated on a social media platform in November 2022 that they do not publicly disclose such on-chain wallet information and confirmation details due to security reasons, preferring cryptographic Reserve Proof or other advanced cryptographic accounting procedures.