Here’s What’s Happening
There will not be a spot bitcoin ETF in the US until 2024 at the earliest. The SEC just delayed its decision on several open applications.
Exchange-traded-funds are pooled investment securities that track an index, sector, commodity, or other assets.
They’re like mutual funds but, unlike mutual funds that are traded just once per day after market close, ETFs can be traded on exchanges like stocks. ETFs are attractive because they provide broad exposure to the underlying asset or asset class during market hours.
Bitcoin ETFs already exist.
Both futures and spot bitcoin ETFs are available in different parts of the world. In the US though, only bitcoin futures ETFs exist.
Futures ETFs are funds that track futures contracts for the expected price of bitcoin at a later date. The futures contracts do not convey bitcoin ownership and the contracts must be settled or traded for new contracts as they approach expiration. Because of this, futures ETFs focus more heavily on speculation rather than real-time exposure to the spot price of a given asset or asset class.
In 2021, Canada launched the world’s first spot bitcoin ETF. Other spot bitcoin ETFs exist in Brazil and, most recently, Amsterdam.
Purpose Investments launched its Bitcoin ETF (BTCC) on the Toronto Stock Exchange in February 2021. The world’s first Bitcoin ETF backed by physically settled bitcoin, it crossed $1 billion CAD ($740 million USD) in assets under management a month after coming to market.
Unlike more speculative futures ETFs, spot ETFs hold the underlying asset and can provide long term investment exposure to the asset.
The U.S. Securities and Exchange Commission (SEC) is yet to approve a spot bitcoin ETF despite allowing bitcoin futures ETFs.
The reason?
The SEC is most likely awaiting increased regulatory clarity and oversight from lawmakers on crypto more…
