8. A risk factor worth considering, however, is that it would also make basis trading much more efficient and attractive at current pricing, particularly if those ETFs can be purchased on margin. We would expect that to bring more basis demand into futures markets, especially

9. the CME but also potentially other onshore exchanges. To the extent that contango normalizes for those contracts, we would expect some pass-through to pricing on unrelated exchanges as well, since presumably there is some arbitrage activity between the two.

10. Normalizing these implied funding spreads with more two-way flow is likely a prerequisite for broadening the base of participants in BTC derivatives more generally, since it takes quite a bullish outlook to be willing to pay 30-40% annually to source levered long exposure."

11. Expect JPMorgan and other legacy institutions to enter this trade in a big way, at first for the yield, and stay when they come to realize what Bitcoin truly is.

The game theory is just starting to heat up. The financial & economic incentives are too strong to ignore.

Fin./