Bitwise is optimistic about a pure Bitcoin ETF after the withdrawal of its futures filing

The chief investment officer of Bitwise revealed why the company opted to discontinue its Bitcoin futures ETF in favor of a spot Bitcoin ETF.

Bitwise Asset Management has withdrawn its application for a Bitcoin (BTC) futures-based exchange-traded fund (ETF) in the United States, after the debut of a number of similar products in the country.

While Bitwise is discontinuing its futures-linked ETF, the business remains positive on a spot Bitcoin ETF that would track Bitcoin directly, chief investment officer Matt Hougan revealed on Wednesday.

Hougan said that Bitwise’s spot filing is still valid and that the company would pursue the introduction of such a product in the United States:

“At the end of the day, what many investors want is a spot Bitcoin ETF. That, we believe, is doable. As a result, Bitwise will continue to pursue that objective and will seek for other methods to assist investors in gaining access to the amazing potential in cryptocurrency.”

Hougan underlined that the first Bitcoin ETF application was submitted by Gemini cryptocurrency exchange founders Cameron and Tyler Winklevoss for a spot-based ETF. The application, filed in 2013, was dismissed by the United States Securities and Exchange Commission in 2017. “Many have worked on this for years, including the staff here,” he said.

Hougan continued by stating that “any ETF is a significant step,” alluding to the many Bitcoin futures ETFs that were approved by the SEC and began trading in October. However, Bitwise chose to withdraw its own application for a variety of reasons.

The executive referenced Bitwise data that indicated that Bitcoin futures ETF contango — a state in which the futures price is higher than the spot price — would cost investors between 5% and 10% each year.

Additionally, Hougan said that Bitcoin futures ETFs had apparently consumed “all available capacity at futures commission merchants.” “This will subside with time, but for the time being, it has added an additional price. As a result? Costs atop costs, plus more complexity, ” he said.

He emphasized that “none of this is to say that futures-based ETFs are terrible,” noting that products such as the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF are “considered versions.”

Bitwise filed for a spot Bitcoin ETF in mid-October, with the intention of listing the product on NYSE Arca. The application comes less than a month after the business applied for the Bitwise Bitcoin Strategy Exchange-Traded Fund in September.

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