If Bloomberg Intelligence’s projections are accurate, the US spot Bitcoin exchange-traded funds (ETFs) market has the potential to become a $100 billion colossus if given the go-ahead.
Futures ETFs traded on U.S. exchanges will likely be more expensive and inefficient than a spot product.
As a result, analysts believe that fresh capital, especially from investors who intend to acquire and hold assets for extended periods, will gravitate toward the spot product.
Although Bitcoin-futures exchange-traded funds were welcomed with open arms when introduced because they represented a turning point for the cryptocurrency industry, they have lagged Bitcoin’s growth this year.
Costs associated with turning over specific futures contracts when they reach their expiration date have eaten into returns, causing funds to become disconnected from the underlying asset.
Because spot exchange-traded funds are more likely to reflect real-time supply and demand than futures-based ETFs, their introduction could result in a “migration of trading activity and liquidity” away from Bitcoin futures markets in the United States.
The weight of the issuers involved, coupled with Grayscale’s recent court victory, has supporters of these funds feeling optimistic that the odds may eventually shift in their favor.
For investors interested in gaining exposure to Bitcoin, the ProShares Bitcoin Strategy ETF is available.
It is expected to have a daily average trading volume of approximately $135 million in 2023 and be the largest Bitcoin-linked ETF.
This will position it in the top 5% of all U.S. exchange-traded funds.
However, if spot-based exchange-traded funds are approved, futures-based Bitcoin ETFs could experience massive asset outflows.