The approval of spot bitcoin ETFs will lead to a massive expansion in the bitcoin lending markets, as traditional finance and crypto market-makers alike will be able to arbitrage price differences between various investment vehicles as well as spot BTC prices. Until recently, some of the larger TradFi market makers had not participated in crypto or bitcoin because the arbitrage opportunities necessitated them getting involved in unregulated venues.
With spot bitcoin ETFs available in places like Nasdaq, bitcoin derivative products in the Chicago Mercantile Exchange and spot bitcoin in regulated exchanges like Coinbase and Kraken, institutions now have all the tools they need to make markets. They will need one more thing — physical bitcoin inventory.
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