Why Bitcoin futures ETFs may not be the ‘best proxy’ for spot market movements


“Bitcoin futures instruments are not always the best proxy for what is happening on the spot market given the unique idiosyncrasies in the futures market prices can be much more volatile.

The crypto community has long awaited an ETF backed by Bitcoin or other cryptocurrencies. Even as countries like Brazil, Canada, and Dubai have approved ETFs for not only Bitcoin but even Ethereum, the American SEC has long opposed the same.

Some respite was expected when the crypto-educated Gary Gensler was appointed as the new chief of the commission, but he too has echoed the sentiments of past leadership. However, speaking at a summit last month, the commissioner had hinted at the possible approval of a Bitcoin ETF in the near future, albeit one backed by BTC futures contracts.

This was immediately followed by several firms like Invesco filing fresh applications for BTC Futures backed ETFs. Although none have received authorization as yet, Bloomberg’s senior ETF strategist Eric Balchunas recently suggested that VanEck and ProShares withdrawing their Ether ETF applications may have paved a path for a BTC ETF approval by the end of October this year.

Not everyone has been in support of the SEC embracing the futures ETF instead. In a recent video, Analyst Coin Bureau (guy.eth) listed out reasons for “why future ETFs suck.” While spot-based ETFs require little management due to them being backed by the coins stored in the fund, futures contracts…



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