• ETFs are funds traded on the stock market and track the price changes of the underlying assets. The biggest difference between futures/spot ETFs is the underlying asset.
• Futures ETF invests in Bitcoin futures contracts, while spot ETF holds actual Bitcoin directly.
• In the case of Bitcoin futures ETF, trading began in August of this year after approval in October 2021 in the United States (*ticker BCOIN). However, current trading volume is decreasing.
• The futures Bitcoin ETF was approved in that it has lower price manipulation and volatility risk compared to the spot ETF.
• On the other hand, the spot ETF is judged to have a high possibility of the operator manipulating the market and the index that tracks the spot ETF in the process of actually holding Bitcoin.
A situation where applications from financial institutions such as Blackrock, Fidelity, and Invesco are rejected or delayed.
Expected effects of launching a spot Bitcoin ETF
• Expected effects of the launch of a spot Bitcoin ETF by the management company. If you think about it from the perspective, in order to operate a spot Bitcoin ETF, you must own a significant amount of Bitcoin.
• A short-term price increase can be expected as large investment companies purchase large quantities of Bitcoin assets for product management.
• If listed on the US stock market, which has a large market size, liquidity supply becomes smoother, while the number of accessible markets increases and TAM can be expanded. *Canada and Europe already have spot ETFs
(US retirement pension market approximately $35 trillion, hedge funds $2.4 trillion, US stock market $46 trillion, etc.)
• This is because the rollover, cost, and management fees of Bitcoin futures ETFs and the management and transaction fees are lower than those of existing trusts, which may increase the interest of institutional investors.
Source: Eugene Investment & Securities Coin Weekly, August 5th week