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Bitwise CEO is bullish on Bitcoin spot ETF

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  • Bitwise had withdrawn its proposal for BTC Futures-based exchange traded product
  • The assets manager is bullish over the BTC spot-based ETF that it filed in mid-October
  • Bitwise noted that the futures-based products have soaked up all available capacity at futures commission merchants

Bitwise is one of the first cryptocurrency index funds that has more than 10 digital assets funds. In September 2021, the technology firm had filed an application with the United States Securities and Exchange Commission (SEC) proposing to launch BTC futures-based products. However, recently, the asset manager has withdrawn its application for a BTC Futures exchange-traded fund. Rather, the firm is planning to focus on BTC spot financial instruments. 

According to Matt Hougan, the chief investment officer at Bitwise, many have worked on crypto spot-based products for several years, since the first application was filed. Hence, the firm is bullish with its latest BTC spot ETF application filed in mid-October.

Bitwise seeks to pursue investors demand

Bitwise’s interest in ETFs arose following the establishment of the first such crypto product in the United States. While dropping its Bitcoin Futures-based ETF, Bitwise is observed being bullish on spot-based products. Such products are designed to track the price of the flagship cryptocurrency directly. On Wednesday, Bitwise’s CIO Hougan, cited that the firm’s spot filing remains intact. Moreover, he also underscored that the asset manager will continue its efforts to launch such products in the nation.

According to Hougan, Bitwise has noted that what many investors globally are seeking is a crypto spot-based exchange-traded fund. Indeed, the firm believes that establishing such a product is possible, and so it will continue to pursue its goal. Simultaneously, the firm will look for other ways also to help investors gain exposure to some of the tremendous opportunities in crypto.

Any ETF is a bigger step

It is noteworthy that the first Bitcoin ETF proposal was filed back in 2013 by the twin founders of Gemini crypto exchange. However, the US SEC refused to approve the launch of uch product. According to Hougan, many including Bitwise’s team have worked for several years on such products. He further went on underlining that any ETF is a bigger step, but there are several reasons that forced the firm to drop their proposal.

Why did the assets manager drop its proposal?

Bitwise CIO, explained that analysis has suggested that the BTC futures ETF contango would cost investors 5%-10% every year. It is such a scenario, when the futures price is higher than the spot price. Moreover, it is observed that the futures-based products have soaked up all available capacity at futures commission merchants. Although, the aforementioned factor will ease over time, it is yet another expense for the investors, that results in costs on top of cost with complexity.

However, Hougan clarified that none of the aforementioned cases signifies that futures-based financial instruments are bad.

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