Traders Look to Bitcoin ETFs to Patch ‘Alameda Gap’ in Crypto

The era of US spot Bitcoin exchange-traded funds is a chance to repair the decay in crypto markets caused by the collapse of the FTX exchange and its sister hedge fund Alameda Research, according to market makers.

The implosion of the two former linchpins of digital assets in late 2022, after a rout in token prices and a huge fraud, left an “Alameda gap” in crypto trading of stunted volumes alongside a reduced capacity to absorb orders smoothly.

Leading market makers Auros, Wintermute Trading Ltd. and GSR Markets Ltd. expect the gap to start closing but say the ...