Why Investment Experts Say a Spot Bitcoin ETF Would Be Superior to Bitcoin Futures ETFs
On Friday, the Securities and Exchange Commission rejected a “spot” bitcoin ETF, one proposed by VanEck. This isn’t the first time. The agency has been rejecting spot bitcoin ETFs, which closely track the price of the underlying assets, since March 2017, when an application by the Winklevoss twins was denied.
Meanwhile, it has allowed two Bitcoin “futures” ETFs, which track the price of bitcoin futures, not bitcoin, one by ProShares, and one by Valkyrie, both of which began trading last month.
However, a number of crypto industry players believe spot ETFs are better for investors.
“A spot ETF would be better than a futures ETF,” says Matt Hougan, chief investment officer of Bitwise Asset Management and the former CEO of ETF.com. “The best ETFs are WYSIWYG — which means, ’what you see is what you get.’ Historically, ETFs get into trouble is that the result they get is not what they think they’re buying. … Under most cases, [futures ETFs will] trail the spot price of bitcoin significantly over time.”
So why would the SEC reject an investment product that many professionals view as better for investors, while approving the one they view as inferior?
