DTCC will not provide loans to investment vehicles with exposure to cryptocurrency

The latest action taken by the Depository Trust and Clearing Corporation (DTCC) is going to impact Bitcoin spot ETF products indirectly. 

The Depository Trust and Clearing Corporation (DTCC) is the leading provider of post-trade clearing and settlement services in the financial markets. In simple words, we can say that DTCC is a middleman for the ETF products buy-sell settlement in the background level, without a high financial burden. 

On 27 April 2024, DTCC decided that it would not provide any collateral to ETFs with exposure to Bitcoin or any cryptocurrencies and also would not extend loans against them. This new rule will come into effect from 30 April 2024 officially.

This recent decision by DTCC won’t affect the trading of ETF products for individuals, but it could lead to reduced liquidity and increased risk. However, it might also discourage larger fund managers from taking on significant lines of credit against their crypto assets, which could prevent market manipulation due to their large positions.

ETH ETF appears on DTCC 

Just a day ago, DTCC listed Franklin Templeton’s proposed Ethereum spot ETF product on its website. People considered the ETH ETF listing on DTCC a significant bullish move for the Ethereum market. 

Here it’s important to note that the listing of any ETF on DTCC does not guarantee approval by the corresponding financial regulator.

In recent weeks, we saw that the legal war between the US SEC and Ethereum surged rapidly and this is a big sign that the SEC body is not in the mood to give a green signal to ETH spot ETF applications. 

Ethereum (ETH) price action 

The current trade price of Ethereum is $3,312 & this trade price has been 6% higher over the last 24 hours.

This small pump in the trade price of Ethereum is showing surging bull sentiments around cryptocurrencies again. 

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