The Comingย of Spot Bitcoinย (BTC) ETFs Threatens Bitcoinย (BTC) Futures ETFs
The approval of the first spot Bitcoinย (BTC) ETF in the Unitedย States is anticipated by early 2024. Althoughย while this development is eagerly awaited by numerous, some already view it as a threat to the existing Bitcoinย (BTC) futures ETFs in the market. Asย ofย now, the most accessible way for Unitedย States fund investors toย participate with digitalย currency is through funds that track Bitcoinย (BTC) futures contracts. These funds atย theย beginning gained wholeย lotย of attention but have since stabilized at around $1 Billion in market value.
Analysts suggest that spot-based funds would be a more accurate way to track Bitcoinโs price and potentially at a lower cost. The introduction of spot ETFs could challenge the futures-based Bitcoinย (BTC) ETFs, as they are likely to be more appealingย to new investors looking to hold over longer time periods. James Seyffart, an analyst at Bloomberg Intelligence, believes that assets and volume will gravitate towards spot Bitcoinย (BTC) ETFs, making them superior products for most investors.
Spot Bitcoinย (BTC) ETFs Could Create a $100 Billion Market
According to Bloomberg Intelligence analysts, the comingย of spot Bitcoinย (BTC) ETFs could create a $100 Billion market and potentially diminish the popularity of Bitcoinย (BTC) futures ETFs. The futures ETFs have failed to keep up with Bitcoinโs rally this year and could experience wholeย lotย of outflows once spot Bitcoinย (BTC) ETFs enter the market. The higher costs and underperformance of futures ETFs compared to spot ETFs are likely to drive this shift in investment. Spot ETFs would provide a more real-time reflection of supply and demand, potentially leading to a shift in trading activity and liquidity away from futures markets.
Inย addition, the introduction of spot ETFs could result in lower fees compared to theย present lineup of futures-based ETFs. As the ETF landscape becomes increasingly competitive, fee battles are expected to arise between different issuers. The launch of Bitcoinย (BTC) ETFs is anticipated to intensify this competition.
Hot Take
The introduction of spot Bitcoinย (BTC) ETFs could revolutionize the Unitedย States cryptocurrency market, providing a more accurate and cost-effective way for investors toย participate with Bitcoin. Althoughย while futures-based ETFs atย theย beginning gained attention, they have struggled toย sustain their momentum. Spot ETFs, with their real-time reflection of supply and demand, are expected to attract new investors and potentially replace futures-based ETFs. This could lead to a $100 Billion market and intensify the competition between ETF issuers. Overall, the comingย of spot Bitcoinย (BTC) ETFs could reshape the investment landscape and offer newย doors for investors.
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