NASDAQ’s David LaValle: "Bitcoin ETF A Turning Point"

[elux]

By Cinthia Murphy | August 06, 2014

There are a lot of questions about the viability of, and the role that the Winklevoss twins’ Winklevoss Bitcoin Trust ETF (COIN) would play in a portfolio. The fund, which remains in the regulatory pipeline awaiting SEC approval, has certainly sparked a conversation about how far is too far when it comes to niche exposure, and [sic] peaked many investors’ interest.

But to David LaValle, vice president of transaction services for Nasdaq OMX and head of ETF business, the first-of-a-kind ETF is nothing short of yet another major innovation in the quickly growing ETF market. LaValle, who not only oversees the exchange-traded product platform at Nasdaq, but also faces off daily with issuers, liquidity providers and trading firms, argues that the bitcoin ETF—which will be listed on the Nasdaq—is a win-win for investors, traders, the issuer and the exchange itself.

ETF.com: The Winklevoss Bitcoin Trust would mark the first time an asset comes to market in an ETF wrapper before it does in a mutual fund. Is that significant?

David LaValle: I think it’s significant that we’re on the precipice of a new investable asset that’s coming to market or becoming available to investors first in the form of an ETF. In some ways, it gives the ETF credibility, and it accentuates many of the benefits of the ETF as an investment wrapper. To that extent, it’s important for the ETF industry.

ETF.com: One of the criticisms we hear about the concept of a bitcoin ETF is that you can own bitcoins directly pretty easily, so why would you want to pay the fees on top of it that come with an ETF wrapper?

LaValle: We view this ETF as an analogue to some of the physically backed commodity products in the industry. The IRS’ ruling classifying bitcoins as commodity and not a currency would also support that.

But perhaps as an investment tool, it’s more easily manageable for a retail investor to hold their investments all in investment products. You can make a similar analogy to gold: I could buy lots of gold coins and hold them physically as well, or I could purchase them through an investment product like an ETF.

There’s availability for accessing the investment in different ways, and each investor is able to pursue that investment thesis through whichever wrapper they’re comfortable with. But I think bringing it in an ETF wrapper gives bitcoins more credibility.

(...)

ETF.com: How big a win is it for Nasdaq to get this listing?

LaValle: We certainly view it as a win. The reality is that we believe Nasdaq to be the home of innovation across all of our business channels, ETF listings included. To the extent that the industry and the investing community are viewing this as an innovation in investment product, we certainly feel we’re at the forefront of that.

(...)

http://www.etf.com/sections/features/22835-nasdaqs-lavalle-bitcoin-etf-a-turning-point.html

tl;dr: Brace yourself.

[1714059950]

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[1714059950]

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[Hyena]

It has been coming since the beginning of times

The comment in the end is funny though:

Underperformance Guaranteed
Sorry, this is going to be a failure of epic (hate using that term, but it fits) proportions.

You say that the CFTC's classification of bitcoin as a commodity is a positive; however, proponents of bitcoin are pushing for a currency classification...you can't have it both ways

I imagine the APs will be thrilled when the value of their baskets are misaligned with the Winkdex spot price.

In the risk factors: "To the extent a private key is lost, destroyed or otherwise compromised and no backup...is accessible, the Trust will be unable to access the bitcoins held..." I'm glad that the safety of the asset is based on whether or not a backup is created

the Winkdex basically has no history, how can we trust the actual pricing accuracy, using momentum of a spot price to establish a spot price for an index is questionable?

This is the greatest risk factor for me: "if APs are able to purchase or sell large aggregations of bitcoins in the open market at prices that are different than the Winkdex spot price, the arbitrage mechanism...may not function properly..." my confidence in this product is increasing exponentially. Give me confidence in the iNAV calculation process for the ETF, how can ETF shareholders trust what is being published, what is to prevent massive intraday swings in premiums and discounts? are the ETF shareholders speculating what the speculators are speculating on? now that's a lot of speculating

It's amazing to me that the Winklevoss twins are going to convince the SEC that this is a legitimate product when there hasn't even been full market acceptance of the underlying to begin with. You are asking regulators to regulate a product holding unregulated securities.
August 06, 2014

[FUR11]

It has been coming since the beginning of times

The comment in the end is funny though:

Underperformance Guaranteed
Sorry, this is going to be a failure of epic (hate using that term, but it fits) proportions.

You say that the CFTC's classification of bitcoin as a commodity is a positive; however, proponents of bitcoin are pushing for a currency classification...you can't have it both ways

I imagine the APs will be thrilled when the value of their baskets are misaligned with the Winkdex spot price.

In the risk factors: "To the extent a private key is lost, destroyed or otherwise compromised and no backup...is accessible, the Trust will be unable to access the bitcoins held..." I'm glad that the safety of the asset is based on whether or not a backup is created

the Winkdex basically has no history, how can we trust the actual pricing accuracy, using momentum of a spot price to establish a spot price for an index is questionable?

This is the greatest risk factor for me: "if APs are able to purchase or sell large aggregations of bitcoins in the open market at prices that are different than the Winkdex spot price, the arbitrage mechanism...may not function properly..." my confidence in this product is increasing exponentially. Give me confidence in the iNAV calculation process for the ETF, how can ETF shareholders trust what is being published, what is to prevent massive intraday swings in premiums and discounts? are the ETF shareholders speculating what the speculators are speculating on? now that's a lot of speculating

It's amazing to me that the Winklevoss twins are going to convince the SEC that this is a legitimate product when there hasn't even been full market acceptance of the underlying to begin with. You are asking regulators to regulate a product holding unregulated securities.
August 06, 2014

Wow that's pretty interesting. The smallprint in the ETF definitely is interesting from a Bitcoin-oriented side. Yeah, I guess it is an experimental vehicle. But the only one on such a scale and such kind. So they have all the advantages of being a first mover. And we as regular Bitcoin holders don't have to care exactly which ETF succeeds. We'll profit.

[BTCtrader71]

Imagine a year ago, if someone had said that in August 2014, a top level NASDAQ exec would be saying that bitcoin will give credibility to the ETF industry. And yet, here it is:

By Cinthia Murphy | August 06, 2014

David LaValle: I think it’s significant that we’re on the precipice of a new investable asset that’s coming to market or becoming available to investors first in the form of an ETF.
In some ways, it gives the ETF credibility, and it accentuates many of the benefits of the ETF as an investment wrapper. To that extent, it’s important for the ETF industry.

http://www.etf.com/sections/features/22835-nasdaqs-lavalle-bitcoin-etf-a-turning-point.html

[azguard]

Imagine a year ago, if someone had said that in August 2014, a top level NASDAQ exec would be saying that bitcoin will give credibility to the ETF industry. And yet, here it is:

By Cinthia Murphy | August 06, 2014

David LaValle: I think it’s significant that we’re on the precipice of a new investable asset that’s coming to market or becoming available to investors first in the form of an ETF.
In some ways, it gives the ETF credibility, and it accentuates many of the benefits of the ETF as an investment wrapper. To that extent, it’s important for the ETF industry.

http://www.etf.com/sections/features/22835-nasdaqs-lavalle-bitcoin-etf-a-turning-point.html

Sure just not to be something that we will all regret.
I must say that this all stink but this is only my opinion on this.

Maybe cuz im little skeptic about it.

[FNG]

Imagine a year ago, if someone had said that in August 2014, a top level NASDAQ exec would be saying that bitcoin will give credibility to the ETF industry. And yet, here it is:

By Cinthia Murphy | August 06, 2014

David LaValle: I think it’s significant that we’re on the precipice of a new investable asset that’s coming to market or becoming available to investors first in the form of an ETF.
In some ways, it gives the ETF credibility, and it accentuates many of the benefits of the ETF as an investment wrapper. To that extent, it’s important for the ETF industry.

http://www.etf.com/sections/features/22835-nasdaqs-lavalle-bitcoin-etf-a-turning-point.html

I find it hard to imagine that it won't be approved at this point. When does the front-running begin..

[WillyBTC]

Excuse my newbishness, but what does being a "top level NASDAQ exec" mean? Does he have power to influence the ETF approval? Seems pretty bullish, but I don't really know what to make of it.

[elux]

Excuse my newbishness, but what does being a "top level NASDAQ exec" mean? Does he have power to influence the ETF approval?
Seems pretty bullish, but I don't really know what to make of it.

David LaValle is "vice president of transaction services for Nasdaq OMX and head of ETF business."

Here's nasdaq.com:

Q&A With NASDAQ's Dave Lavalle

...

Q: How long have you been at NASDAQ and what is your current role? What did you do before?

A: I've worked at NASDAQ for almost three years. Prior to working here, I managed a broker/dealer trader firm that specialized in trading cash equities and ETFs. Currently, I run the ETF market at NASDAQ focusing on the listing and trading businesses while supporting the issuer, market making and liquidity providing communities.

...

http://www.nasdaq.com/article/etf-insider-qa-with-nasdaqs-dave-lavalle-cm311066#ixzz39gjgj900

He runs NASDAQ's ETF business.

Executive Changes at Nasdaq OMX


David LaValle was named VP of Transaction Services U.S. in a newly created position overseeing Nasdaq OMX’s exchange traded funds (ETF) business.

...

LaValle’s role will be to oversee the ETF trading business, focusing on furthering the listing of ETFs while working with the market making community along with many strategic constituents that interface with exchanged traded funds, according to the release. LaValle will work across different Nasdaq OMX business lines including the Nasdaq OMX indexing, listing, capital markets and trading businesses.

http://www.wallstreetandtech.com/exchanges/executive-changes-at-nasdaq-omx/d/d-id/1264705?

[sally87]

Excuse my newbishness, but what does being a "top level NASDAQ exec" mean? Does he have power to influence the ETF approval? Seems pretty bullish, but I don't really know what to make of it.

He's the Vice-President at nasdaq and head bussines. This is the top at nasdaq.