‘Wrong Kind’ of Bitcoin ETF Head for US Approval as Futures Bids Made

Bitcoin Bitcoin ETF Futures Investing SEC
Last updated:
Author
Author
Tim Alper
About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Bitcoiners have been waiting for American regulators to green-light a bitcoin (BTC) exchange-traded fund (ETF) for what seems like ages. And although it looks like they are finally close to a breakthrough, it turns out that after all the fuss, they might end up with the wrong kind of BTC ETF after all.

Source: Adobe/Krakenimages.com

After many previous false starts, the new head of the Securities and Exchange Commission (SEC) Gary Gensler made a speech this week hinting that the regulator could finally give its blessing to a bitcoin ETF, but with one key proviso: The ETF would need to be based on futures rather than BTC itself.

In the speech, Gensler noted that “there are a number of mutual funds that invest in bitcoin futures on the Chicago Mercantile Exchange (CME). I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded bitcoin futures.”

For most bitcoiners, this measure fails to deliver what they want: A mainstream ETF that would signal that the traditional world of finance has finally embraced the token.

The Bloomberg Senior ETF Analyst Eric Balchunas wrote on Twitter that futures-based BTC funds “could end up funneling billions into derivatives” as well as the Grayscale Bitcoin Trust, which he added “is a major reason” than an ETF approval is “needed” as well as “up north into another country [Canada]” when “the people just want an ETF that holds bitcoin directly.”

A number of bitcoin ETFs have won approval in Canada, with many experiencing rapid growth.

However, Bloomberg reported that fund managers “are already putting” Gensler’s assertion “to the test.”

Per the report, “within the past 24 hours both ProShares and Invesco have registered plans with the SEC for funds based on futures,” adding that these filings “could well be the first of many.”

Bloomberg quoted Todd Rosenbluth, the head of ETF and mutual fund research at the investment researcher CFRA, as agreeing, stating:

“With Gensler indicating the SEC is more likely to approve a futures-based bitcoin ETF over a physical one, the race is on to offer such products. There is pent-up demand for a United States-listed bitcoin ETF. We expect to see more filings in the coming days.”

VanEck, which has been pushing for the approval of its own BTC ETF for years now, smarted at the news, with Matthew Sigel, its head of digital assets research, stating (in a separate Bloomberg article):

“We see bitcoin futures-based funds as inferior products that have consistently underperformed the Bitcoin price and bring additional complexities in regards to how they must be managed, at a higher cost than ETFs. Simply put, they are substandard vehicles.”

Others agreed – and pointed to the Canadian example. Nate Geraci, the president of the ETF Store, claimed:

“Investors want the real deal and a quick glance north of the border shows the real deal not only exists, but is prospering.”

Meanwhile, Mohit Bajaj, the director of ETFs at WallachBeth Capital, was quoted as explaining bitcoiners’ lukewarm reception to the Gensler speech thusly:

“Futures are a derivative of bitcoin and there is no physical bitcoin backing behind it. It’s a proxy of the performance of bitcoin. Maybe it’s just a first step. Maybe it will lead to more comfortability in eventually leading toward getting an actual bitcoin ETF.”

At 11:03 UTC, BTC trades at USD 40,730 and is up by 7% in a day and 2% in a week.
____
Learn more:
SEC Sends Negative-ish Bitcoin ETF Signal that May Be Positive for Grayscale
New Bitcoin ETF Investors To Come Via Dubai

Grayscale Still ‘Commited’ To Converting Its Bitcoin Trust into ETF
Launching Bitcoin ETFs Could Burst the Bitcoin Floodgates – Study

More Articles

Blockchain News
Crypto Market Maker Wintermute Eyes New York for US Expansion: Report
Shalini Nagarajan
Shalini Nagarajan
2025-02-19 05:50:38
Bitcoin News
Saylor’s Strategy Aims to Raise Another $2 Billion via Convertible Notes for More BTC Purchases
Ruholamin Haqshanas
Ruholamin Haqshanas
2025-02-19 05:31:30
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors