Bitwise Bows Out of Bitcoin Futures ETF But Eyes Spot ETF Gold

Bitwise’s Strategic Withdrawal

In a shocking turn of events, Bitwise Asset Management has decided to withdraw its application for a Bitcoin futures-based exchange-traded fund (ETF). What’s the deal? Is it a sign of market chaos or a calculated step back? The firm remains optimistic about launching a spot Bitcoin ETF, which aims to track Bitcoin directly. Matt Hougan, Bitwise’s chief investment officer, spilled the beans on Wednesday, reassuring investors that their commitment to a spot Bitcoin ETF remains unshaken.

The ETF Tango: Futures vs. Spot

When asked about the rationale behind their withdrawal, Hougan remarked that “ultimately, what many investors want is a spot Bitcoin ETF.” There’s that age-old debate again: Does investing in futures provide the same thrill as a direct investment? Apparently, Bitwise thinks not. While they acknowledge that the first Bitcoin ETF ever filed was a spot-based one back in 2013 by the Winklevoss twins, times have changed, and so have the strategies of the big boys in crypto.

Understanding Futures ETF Challenges

According to Bitwise analysis, the current Bitcoin futures ETF dynamics are not doing investors any favors. The analysis suggests that the futures ETF contango—where futures prices surpass spot prices—could cost investors between 5% and 10% annually. Ouch! It’s like getting hit with a surprise cover charge at a trendy bar after already paying for your drinks. Nobody wants that.

Costs, Complexity, and Compliance

Weighing in on the matter, Hougan pointed out that BTC futures ETFs have seemingly soaked up “all available capacity at futures commission merchants.” This capacity crunch has added complexity and costs onto costs—like a multi-layer cake of endless fees! And while Hougan underscored that futures-based ETFs aren’t inherently bad, it’s clear that access comes at a price.

Charting the Course Forward

Despite the hiccup in their futures ETF application, Bitwise isn’t throwing in the towel anytime soon. Hougan confirmed that they have filed for a spot Bitcoin ETF with plans to list on NYSE Arca. The clock is ticking, and with more competition entering the market, time will tell whether Bitwise can capture the elusive spot ETF unicorn or if they’ll remain tethered to the futures debate. “We will look for other ways to help investors in crypto,” he assured. Keep your eyes peeled, folks; the world of Bitcoin ETFs is only getting started!