Continuous Liquidity Essential To ‘Prudent Risk Management’

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Bitcoin’s (CRYPTO: BTC) flash crash late Friday, which happened outside of regular trading hours, has reignited debate about the operating hours of spot BTC exchange-traded funds, particularly the iShares Bitcoin Trust ETF (NASDAQ:IBIT).

The apex cryptocurrency collapsed from $116,000 to under $110,000 within minutes after President Donald Trump threatened 100% tariffs on China in response to “aggressive stance” on export controls.

The sudden spike caught traders off-guard, triggering over $19 billion in liquidations, the largest single-day wipeout in cryptocurrency history.”

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The crash fueled concerns about the lack of 24/7 trading of BTC exchange-traded funds, which have become a popular vehicle for institutional investors, Forbes reported, quoting Tommy Doyle, global head of client management at Xapo Bank.

“The extreme volatility in the price of Bitcoin overnight highlights why institutional investors increasingly view access to 24/7 liquidity as essential to prudent risk management,” Doyle said.

Notably, these ETFs, including the nearly $100 billion IBIT, are bound by stock trading hours, which prevents investors from responding to weekend price shifts.

“Whilst Bitcoin ETFs remain bound by traditional market trading hours, institutional investors with direct bitcoin accounts can continue to access liquidity and risk manage their bitcoin exposure throughout the weekend, especially relevant amid recent seismic price moves,” Doyle told Forbes.

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It’s worth noting that Robinhood allows trading from 8 p.m. ET on Sunday until 8 p.m. ET on Friday, with some restrictions.

BlackRock’s IBIT ETF is the largest cryptocurrency-based investment fund currently in operation, with assets under management totaling almost $94 billion, according to SoSo Value.

Overall, BTC ETFs reported net inflows exceeding $2.70 billion for the week ended Oct.10.

Photo Courtesy: Arsenii Palivoda on Shutterstock.com

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