BitMEX Research: If only cash subscriptions and redemptions are allowed, most of the advantages of the ETF structure will be lost

BitMEX Research stated on social media that the operation of ETFs is as follows: If an ETF trades at a premium, it is usually due to more buyers than sellers, and authorized participants (APs) are motivated to purchase relevant tools and deliver them to the issuer to obtain new ETF units. Then, due to ETF premium trading, authorized participants can sell new ETF units on the market and make a profit. If the ETF trades at a discount, the situation is reversed. APs buy ETF units on the market, provide them to the issuer, and receive relevant assets. Then they sell the relevant assets, generating profits because the product is traded at a discount. Most importantly, there should be multiple competing APs. This ensures that the product can handle a large amount of capital flow and has a lower tracking error. If only cash purchases and redemptions are allowed, most of the advantages of the ETF structure will be lost. Now, only the issuer can buy and sell Bitcoin on the market. Many of the competitors that make ETFs effective will no longer exist.