Bitwise Bullish On Pure Bitcoin ETF After Abandoning Futures Deposit

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Bitwise Asset Management has withdrawn its application for Bitcoin Futures Exchange Traded Fund (ETF) among a number of such products launched in the United States.

While abandoning its ETF linked to futures, the company is still bullish on a spot Bitcoin ETF, designed to directly track Bitcoin, Bitwise investment director Matt Hougan announced on November 10.

Hougan said Bitwise’s cash deposit remains intact and the company will continue efforts to launch such a product in the United States:

Ultimately, what many investors want is a spot Bitcoin ETF. We believe it is possible. Bitwise will therefore continue to pursue this goal and we will look for other ways to help investors access the incredible opportunities in crypto.

The IOC pointed out that the first Bitcoin ETF application ever filed was a spot ETF by crypto exchange founders Gemini, Cameron and Tyler Winklevoss. Filed in 2013, the application was rejected by the United States Securities and Exchange Commission (SEC) in 2017. For years, many have worked on it, including the team here, he said.

Hougan went on to say that any ETF is a big step, referring to several Bitcoin futures ETFs receiving SEC approval and starting to trade in October. However, there are a number of reasons why Bitwise preferred to withdraw their own candidacy.

The executive cited a Bitwise analysis suggesting that the Bitcoin futures ETF contango a situation where the futures price is higher than the spot price would cost investors 5% to 10% per year.

Hougan also noted that BTC futures ETFs would have absorbed all available capacity at futures commission merchants. This will subside over time, but for now it adds yet another expense. The result? Costs on top of costs, plus additional complexity, he said.

Related: BlockFi Files for Physically Supported Bitcoin ETF

The CIO stressed that none of this means futures ETFs are bad, adding that products like the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF are considered versions.

As previously reported by Cointelegraph, Bitwise applied for a Bitcoin spot ETF in mid-October, planning to list the product on the NYSE Arca electronic exchange. The request came just a month after the company filed the Bitwise Bitcoin Strategy ETF in September.

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