As the mega event the cryptocurrency industry waits for years, the US SEC is about to approve the Bitcoin futures ETF. ProShares’ Bitcoin (BTC) futures ETF is set to begin trading as soon as Monday. Is it a better buy than the popular Grayscale Bitcoin Trust?
The US Securities and Exchange Commission (SEC) has been postponing the Bitcoin ETF approval process for years. ETF products allow individual investors to trade directly on the U.S. stock exchange. Like listed company stocks, ETFs are compliant and can be included in pension funds and 401(k) plans. This will be a significant event for mainstream adoption of Bitcoin and other cryptocurrencies.
According to the prospectus, ProShares has received SEC’s approval for its Bitcoin Strategy ETF, which can launch on the market on Monday. Under the ticker BITO, it can officially open for trading within this week.
Bloomberg Intelligence ETF analyst James Seyffart expects the ProShares Bitcoin Strategy ETF will be launched on Monday or Tuesday. The ETF charges users about 95 basis points (bps), which is much lower than the 2% charged by the Grayscale Bitcoin Trust (GBTC).
Another difference of ProShares’ Bitcoin futures ETF is that it is based on the Bitcoin futures contracts, rather than Bitcoin’s prices on the spot market.
The US SEC has not approved spot Bitcoin ETFs yet. Existing Bitcoin-related investment products include Bitwise’s Bitcoin index fund, and Grayscale Bitcoin Trust.
Grayscale’s crypto trust funds, like Bitcoin and Ethereum Trust – GBTC and GETH – directly link to spot market prices of cryptocurrencies like Bitcoin and Ethereum. Yet, those products are only available for qualified investors, trading in over-the-counter (OTC) desks. Meanwhile, Grayscale is applying to convert its trust funds into ETFs.
The U.S. SEC receives more than 30 Bitcoin ETF applications. Applicants include ARK Invest, Valkyrie, Invesco, Fidelity, Galaxy Digital, etc.
However, the launch of the Bitcoin futures ETF may not be good news for the market.
Pantera Capital CEO Dan Morehead believes this is a typical ‘Buy the rumor, sell the fact’ event. This is similar to the launch of CME Bitcoin futures in December 2017, and Coinbase’s NASDAQ listing in April 2021. Bitcoin’s prices plummeted after these two major events.
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