Bart Smith

I’m incredibly excited to announce the launch of my next project: Avalanche Treasury Co. 🧵

Today’s approval is another sign that the CFTC and SEC are bringing crypto-native products into the regulatory fold. Great to see U.S. regulators working to give domestic exchanges a clear path to participate in growing 24/7 crypto markets.

I got into ETFs because they solved a real problem for investors by giving them cheap, passive exposure to the market.

Janus is taking a similar approach with its new tokenized Nasdaq-100 fund. Tokenization can help bring more competition and innovation to markets historically dominated by a small number of established players.

Recent volatility in equity-linked perpetual futures was an interesting test for markets that operate outside traditional trading hours.

I've talked before about Hyperliquid and how retail participation can establish liquidity in markets that institutions eventually have a reason to access.

But there's an important distinction between creating access to a market and creating the liquidity necessary to support it.

When traditional equity markets are closed, market makers have fewer ways to hedge their exposure. That can lead to wider spreads, price dislocations and more pronounced volatility, particularly when leveraged positions are being liquidated.

To me, this doesn't undermine the case for 24/7 trading. It highlights what still needs to develop for these markets to operate at scale.

Retail participation can create the initial demand and liquidity, but deeper market-making activity, more efficient pricing and institutional participation are what ultimately make that liquidity sustainable.

The continued development of market infrastructure and liquidity will be critical to supporting meaningful trading activity around the clock.

BlackRock's move toward a Bitcoin buffer ETF is another interesting development in how traditional financial products are evolving to accommodate digital assets.

Buffer ETFs became increasingly popular following COVID. These products use options to provide a degree of downside protection in exchange for limiting upside participation, giving investors another way to gain exposure to an otherwise volatile asset.

For investors who wouldn't otherwise own Bitcoin, I think that's a valuable addition to the market.

It also raises an interesting portfolio construction question. If you're managing a diversified portfolio with discipline, there's an argument for maintaining exposure to that volatility rather than limiting it.

For example, a 2% BTC allocation with systematic rebalancing at predetermined thresholds allows investors to trim exposure following significant appreciation and add following declines. Over time, that volatility can create opportunities within a broader portfolio, although the strategy doesn't guarantee better returns.

Ultimately, different investors have different objectives and risk tolerances. The expansion of products that allow investors to express those preferences is a positive development for the asset class.