The Depository Trust and Clearing Corporation (DTCC) has made a statement declaring that exchange-traded funds (ETFs) linked to Bitcoin (BTC) or cryptocurrencies hold no value as investments that can be used as collateral.

In the announcement, the DTCC, which provides clearing and settlement services to the US financial markets, states that ETFs connected to digital assets will be subjected to a 100% “haircut.”

“No collateral value will be assigned to any ETF or investment vehicle that includes Bitcoin or any other cryptocurrency as an underlying investment, therefore it will be subjected to a 100% haircut.”

According to the announcement, these changes by the DTCC will come into effect on April 30, 2024, and will likely impact the valuation of positions on the company’s collateral monitor.

Once implemented, these changes mean that entities will no longer be able to utilize Bitcoin or crypto-linked ETFs as collateral when seeking credit or financing through the DTCC.

In March, digital assets manager CoinShares reported that institutional investors had poured a new record of $2.9 billion into crypto investment products on a weekly basis, with much of it driven by Bitcoin ETFs.

On-chain analyst Willy Woo recently shared with his 1 million followers on the social media platform X that daily inflows of capital being stored by the Bitcoin network, largely due to the ETFs, have reached $2 billion per day. This level of inflow is equivalent to the last major bull market.

“This time it should climb even higher. Spot ETFs are significantly increasing the inflow. The inflows are measured on-chain, so this includes all investors. It’s about 90% accurate. It also indicates that the ETFs currently account for approximately 30% of total flows.”

To be specific, the daily change in entity-adjusted realized capitalization is taken into account. Entity-adjusted Real Cap calculates the price paid for every BTC when they were moved to the current holders. This is a measure of the USD stored in the network.

Source: Willy Woo/X