Bitwise Asset Management has withdrawn its application for an exchange-traded fund (ETF) based on Bitcoin (BTC) futures amid several launches of these products in the United States.
Although it is ditching its futures-linked ETF, the company is still betting on a spot Bitcoin ETF, which is designed to directly track Bitcoin.Bitwise chief investment officer Matt Hougan announced Wednesday.
Hougan said that Bitwise’s filing remains intact and that the company will continue its efforts to launch such a product in the United States:
Ultimately, what many investors want is a spot Bitcoin ETF. We believe that this is possible. Therefore, Bitwise will continue to pursue that goal and we will look for other ways to help investors gain access to the incredible opportunities in crypto. “
Hougan emphasized that the first Bitcoin ETF application to come forward was a spot ETF from crypto exchange Gemini founders Cameron and Tyler Winklevoss. Filed in 2013, the application was denied by the U.S. Securities and Exchange Commission in 2017. “For years, many have worked on this, including this team”, said.
Hougan went on to say that “any ETF is a big step”, referring to multiple Bitcoin futures ETFs that receive SEC approval and start trading in October. However, there are several reasons why Bitwise chose to withdraw its own application.
The executive cited Bitwise analysis that suggests than the contango Bitcoin futures ETF, a situation where the futures price is higher than the spot, it would cost investors between 5% and 10% per year.
Hougan too he pointed which reportedly BTC futures ETFs have absorbed “all available capacity from futures commission traders”. “This will ease over time, but for now, one more expense is added. The result? Costs above costs, more additional complexity, ”he said.
He stressed that “none of this means futures-based ETFs are bad”, adding that products like the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF are “thoughtful versions.”
As previously reported by Cointelegraph, Bitwise applied for a spot Bitcoin ETF in mid-October, with the intention of listing the product on the NYSE Arca electronic stock exchange. The request came just a month after the company applied for the Bitwise Bitcoin Strategy ETF in September.
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