Bitwise Asset Management has withdrawn its application to set up an exchange-traded fund (ETF) based on Bitcoin futures (BTC) contracts amid the launch of a number of such products in the US.
As they phase out futures ETFs, the company remains bullish on a spot Bitcoin ETF designed to track bitcoin directly, Bitwise director Matt Hogan, investment manager at Bitwise, said on November 10.
Hogan said that Bitwise’s instant archiving remains unchanged and the company will continue its efforts to launch such a product in the US:
“Ultimately, what many investors want is an instant Bitcoin ETF. We believe it is possible. Therefore, Bitwise will continue to pursue this goal and we will look for other ways to help investors access great opportunities and cryptocurrencies.”
The CIO emphasized that the first Bitcoin ETF ever presented was an ETF created by cryptocurrency founders Gemini Cameron and Tyler Winklevoss. The 2013 filing was rejected by the US Securities and Exchange Commission (SEC) in 2017. “A lot of people have worked on this over the years, including the team here,” he said.
Hogan went on to say that “any ETF is a big step,” referring to several Bitcoin ETF futures that received SEC approval and began trading in October. However, there are a number of reasons why Bitwise chose to scrap its own app.
The Exec cited Bitcoin analysis which indicates that Contango Bitcoin ETF futures – a situation in which the futures price is higher than the spot price – will cost investors between 5% and 10% per year.
Hogan also noted that Bitcoin futures ETFs have used up “all the power available to commission futures traders.” “This will decrease over time, but at this point other costs have been added. As a result? Cost over cost plus added complexity.”
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“None of this means that future ETFs are bad,” stressed the CIO, adding that products like the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF are “thoughtful versions.”
As previously reported by Cointelegraph, Bitwise filed for a Bitcoin ETF in mid-October and plans to list the product on NYSE Arca, an online stock exchange. The application came just one month after the company applied for the Bitwise Bitcoin Strategy ETF in September.