DTCC decides to no longer provide collateral or loans for ETFs exposed to Bitcoin or other cryptocurrencies

According to U.Today, the Depository Trust and Clearing Corporation (DTCC) recently decided to no longer provide collateral or loans for exchange-traded funds (ETFs) exposed to Bitcoin or other cryptocurrencies. DTCC plans to make changes to the collateral value of these special securities in its annual credit facility update on April 30. For spot Bitcoin ETFs like BlackRock's IBIT, Fidelity Investment's FBTC and other crypto ETPs, this will result in a 100% reduction in their collateral value. However, cryptocurrency enthusiast K.O. Kryptowaluty believes that this new policy only applies to inter-entity settlements within the credit system. He further explained that the lending and collateralization of crypto ETFs in brokerage activities will continue and will not be affected in any way. However, he pointed out that this depends largely on the risk tolerance of individual brokers. This move may trigger some speculation and concerns among spot Bitcoin ETF investors, who may believe that their investment is no longer valuable. This perception may trigger a large-scale sell-off, resulting in a sharp drop in the asset management scale of the ETF and the value of its underlying cryptocurrency. However, such a decision may also help alleviate the negative interference of Wall Street companies in the growing crypto ETF field. Only time will tell us how investors and other interested parties will turn out.