24/7 Cryptocurrency News

DTCC Announces ETFs with Bitcoin Exposure to Hold Zero Collateral Value for Loans

DTCC's revision of collateral values for securities, especially ETFs containing cryptocurrencies like Bitcoin, sparks concerns in the financial sector.
Published by
DTCC Announces ETFs with Bitcoin Exposure to Hold Zero Collateral Value for Loans

Highlights

  • Effective April 30, 2024, ETFs with crypto exposiure will face a 100% haircut, says DTCC.
  • The zero collateral assignment applies solely to inter-entity settlement in the LOC system.
  • Despite regulatory challenges, Bitcoin ETFs continue to attract investors.

The financial services behemoth DTCC has unequivocally stated its stance: it will not allocate any collateral to exchange-traded funds (ETFs) with exposure to Bitcoin or cryptocurrencies, nor will it extend any loans against them.

DTCC Giving A Big Blow to Bitcoin ETFs?

Starting April 30, 2024, the Depository Trust & Clearing Corporation (DTCC) will enact amendments to collateral values for select securities as part of its annual line-of-credit facility renewal. These modifications could impact position values within the Collateral Monitor.

DTCC announced that effective immediately, no collateral value will be assigned to Exchange-Traded Funds (ETFs) or similar investment instruments featuring Bitcoin or other cryptocurrencies as underlying assets. Consequently, these securities will face a 100% haircut.

However, popular cryptocurrency enthusiast K.O. Kryptowaluty explained that this would be applicable only to the inter-entity settlement in the Line of Credit (LOC) system.

A Line of Credit serves as a financial tool enabling market participants to access borrowed funds for short-term transaction financing or to address liquidity requirements. The utilization of cryptocurrency Exchange-Traded Funds (ETFs) for lending purposes and as collateral in brokerage activities remains unaffected, remaining subject to the risk tolerance of individual brokers.

The launch of spot Bitcoin ETFs has led to growing institutional interest in the investment product. Within three months of launch, all the U.S. Bitcoin ETFs have collectively garnered more than $12.5 billion in assets under management (AUM).

BTC ETF Inflows Are Decelerating

After a strong start to the launch of Bitcoin ETFs, the overall inflows have been on a decelerating trajectory in recent weeks. Over the last three days, these spot Bitcoin ETFs have witnessed strong outflows, reported by several ETF issuers.

In the latest data reported on April 27, the total net outflow of Bitcoin spot ETFs amounted to $83.6147 million. Grayscale’s ETF, GBTC, experienced a significant single-day outflow of $82.4197 million. Currently, the historical net outflow of GBTC stands at a substantial $17.185 billion, as per data from Farside investors.

While DTCC has taken a stand against crypto ETFs, the same is not true for other traditional players. 100-year-old bank BNY Melon recently stated that it is seeking exposure to Bitcoin ETFs. The recent submission of BNY Mellon’s Form 13F to the Securities and Exchange Commission has garnered significant attention across the global crypto community.

The bank’s investments in BlackRock and Grayscale Bitcoin ETFs signify not only local occurrences but also serve as a global indication of the growing acknowledgment and integration of cryptocurrencies within the traditional financial sector.

Share
Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • Bitcoin News

Peter Schiff Criticizes Bitcoin’s Performance Following Gold’s Rally To New ATH

Popular gold advocate Peter Schiff has criticized Bitcoin’s weakness against gold, calling it near bear…

September 7, 2025
  • Bitcoin News

Arkham Uncovers $5 Billion in Untouched Bitcoin From Germany’s Movie2K Seizure

Arkham Intelligence has identified 45,000 Bitcoin (BTC), valued at nearly $5 billion, that remains untouched…

September 7, 2025
  • 24/7 Cryptocurrency News

Ethereum Spot ETFs Record $447 Million in Outflows Amid Crypto Market Decline

Ethereum ETFs faced a sharp investor pullback this week, shedding nearly half a billion dollars…

September 6, 2025
  • 24/7 Cryptocurrency News

World Liberty Financial Discloses Reason for Blacklisting 272 Wallets

World Liberty Financial (WLFI) has confirmed that it blacklisted 272 wallets and explained why it…

September 6, 2025
  • 24/7 Cryptocurrency News

September 50 BPS Fed Rate Cut Odds Climb Ahead of CPI, PPI Data

Traders are beginning to price in the possibility of a 50 basis points (bps) Fed…

September 6, 2025
  • 24/7 Cryptocurrency News

Michael Saylor Spotlights Strategy’s Performance Following S&P 500 Snub

Michael Saylor highlighted Strategy’s outperformance after the company was excluded from the S&P 500. The…

September 6, 2025