The launch of a Bitcoin Exchange Traded Fund (ETF) has long been anticipated by the cryptocurrency community, as it would bring added liquidity and pave the way for institutional investors to enter the market.
However, it still remains to be seen if the SEC will approve a Bitcoin ETF, as they have been increasingly scrutinizing the crypto space. In the meantime, many have turned to alternative products such as Bitcoin Futures ETFs to gain exposure to Bitcoin. But, with a growing possibility of a spot ETF getting approved, how would that affect the demand for Bitcoin Futures ETFs?
We spoke to Nick rental, portfolio manager at ProShares, who noted that while Bitcoin Futures ETFs have their benefits, a spot ETF could potentially overshadow their demand. He said,“The likely reaction to an approved Bitcoin spot ETF would be a combination of enthusiasm tinged with nervousness. On the one hand, the potential for increased liquidity and mainstream institutional participation. On the other, there is some worry of how it could impact the Futures ETFs markets.”
Rental went on to highlight the fact that at first, a spot ETF could bring much needed attention and liquidity to the crypto markets, which would be beneficial to both the Bitcoin spot markets and the Futures markets. However, if such a product did end up garnering more attention, futures markets could suffer as investors shift their focus to the spot ETF.
Overall, Rental expressed optimism to the possibility of a Bitcoin ETF approval and said,“We are keeping our fingers crossed for the approval of a spot ETF and remain confident in the Bitcoin market as a whole. We view it as both a short-term speculator’s market as well as a long-term currency alternative that has the potential to revolutionize the financial system.”