Bitcoin & Markets Are Pumping! Hear Our Thoughts...
Unlike ETFs, financial products lacking share creation/destruction mechanisms inherently risk trading away from net asset value, often assuming perpetual price increases.
Takeways• DATs lack ETF-like share mechanisms, risking price deviations from net asset value.
• A faulty assumption of perpetual price increases often underlies DAT investments.
• Market anticipates Q4 rally, with a CME gap closure seen as vital for organic growth.
Financial products like DATs face inherent risks due to the absence of mechanisms to create or destroy shares, which can lead to a trade away from their net asset value. These products often operate under the faulty assumption that their price will consistently increase, overlooking associated custody costs. Market participants are anticipating Q4 movements, with some hoping for a significant market rally after a potential 'shakeout' period.
Risks of DATs
• 00:00:00 The main problem with DATs is the lack of mechanics to create or destroy shares, unlike ETFs, which prevents them from effectively tracking asset prices. This structural flaw means they often trade away from their net asset value, and theoretically, they should trade at a slight discount due to custody costs. A key, but flawed, assumption driving investment in DATs is the belief that their price will always increase.
Market Speculation
• 00:00:43 Market participants are actively discussing the upcoming Q4, with some expressing optimism for a significant market upturn following a perceived 'shakeout' period. There's also attention on a CME gap between 110.5k and 111.3k, which generally tends to close, with closing it seen as crucial for a more organic upward continuation in the market.