After many years, the Bitcoin ETF finally landed.
On October 15th, after many deliberations by the US Securities and Exchange Commission, the first Bitcoin futures ETF product was formally approved last Friday . On October 19th, it landed on Nasdaq and started formal trading. The first day of trading, The total trading volume was 24.42 million, and the turnover was as high as 1.007 billion US dollars , and set a record for the second highest trading volume on the first day of ETF listing, second only to BlackRock’s carbon fund.
Since the submission of the first Bitcoin ETF application in 2013, U.S. regulators have rejected almost every Bitcoin ETF application. This approval is the first time in 8 years, which also ushered in a breakthrough in the application of Bitcoin ETF. , On the 15th, the BTC price exceeded $60,000.
What exactly is a Bitcoin futures ETF? What is special about this ETF product? What impact will its launch bring? Can it become the “detonator” of the market as most people expect?
If you have bought a fund, you will not be unfamiliar with the term ETF. ETF (Exchange Traded Fund) is a very common product category in the traditional financial market. Simply put, ETF is essentially an open-end fund . According to what he tracks The underlying assets are different, and there are different ETF categories, such as gold ETF, SSE 50 ETF, Technology 100 ETF, etc. They track gold, SSE 50 and Technology 100 indexes respectively, and build a portfolio investment that tracks changes in the index by copying the underlying index, which simplifies The user’s investment process.
Therefore, the Bitcoin ETF we often talk about is to track Bitcoin as the underlying asset. It is an indirect way to buy and invest in Bitcoin. The reason why many people pay attention to the landing of Bitcoin ETF is the main reason behind it. One: Approval means compliance. After compliance, ETF will become a door for traditional funds to the encrypted digital field. This is an event related to the interests of many people, but the ETF approved this time has some advantages. different.
The approved product was issued by the American management company ProShares, named Bitcoin Strategy ETF. ProShares was established in 1997 and is a financial institution specializing in providing various ETFs in the United States. It currently has assets of more than 64 billion U.S. dollars . As early as 2017 ProShares started the declaration of the Bitcoin ETF in 1998 and was approved after revising the plan and reapplying in August this year.
First of all, it is important to note that this product tracks the Chicago Exchange ( CME ) Bitcoin futures price, not the Bitcoin spot, and because of this, it is difficult to directly trade in the Bitcoin spot market.
Secondly, the threshold of this product is not low . According to the product manual, the purchase and redemption of the product adopts an all-cash model, the rate is 0.95%, the minimum purchase unit is 10,000, and the opening price on the first day is 40 US dollars per copy, which means that the starting threshold for the transaction is at least 40 Ten thousand US dollars , this is probably a height that is difficult for ordinary traders to achieve. It can be said that “this “door” is open but not fully opened.”
For a long time, many companies in the United States have issued various ETFs related to digital assets through indirect means, such as Amplify Trans formational Data Sharing ETF, VanEck Digital Trans formation ETF, etc., among which the management scale of 3 products has even reached More than 100 million US dollars, and showed a good rate of return.
U.S. blockchain/digital currency related ETF data source: Shen Wan Hongyuan Research
In addition, from a global perspective, this ETF issued by ProShares is not the first Bitcoin ETF.
As early as February 18 this year, the Toronto Exchange of Canada listed the Bitcoin ETF product named Purpose Bitcoin ETF , and there were 9.65 million transactions on the first day of trading, squeezing into the trading volume of the Toronto Exchange on that day The top 10, and in addition to Bitcoin ETF, they also listed Ethereum ETF.
On October 16, Europe also launched its first Bitcoin spot ETF, issued by Jacobi Asset Management. It is an ETF tracking spot Bitcoin and plans to be listed on the stock exchange Cboe Europe, but Jacobi’s Bitcoin ETF Only open to institutional investors.
The reason why Bitcoin ETFs in the United States have received the most attention is mainly because of the financial status of the United States and its current dominance in the field of encrypted finance. Their attitude towards Bitcoin ETFs can even more affect the sentiment of the entire crypto market.
But whether the Bitcoin futures ETF can really open a door to mainstream funds, some observers remain skeptical.
Because ” futures premium ” (futures premium generally refers to the phenomenon that under normal supply and demand, the spot price is relatively lower than the futures price, and the recent contract is lower than the forward contract price), the fund cannot match the actual price of Bitcoin, resulting in Additional transaction costs. At the same time, some investors pointed out that owning assets such as Bitcoin on a centralized platform is itself a contradiction with the spirit of the blockchain.
Anthony Pompliano, co-founder of Morgan Creek, a digital asset management company, believes, ” Whether it is from the perspective of price tracking or fee structure, it would be better to approve a Bitcoin spot ETF. Futures ETFs will only bring users higher costs. “.
So why did the US Securities Regulatory Commission choose a Bitcoin futures ETF instead of a spot ETF? The answer is also very simple, two words- security .
U.S. SEC Chairman Gensler believes that futures-based Bitcoin ETFs are less risky for investors because they are rooted in regulated Chicago Bitcoin futures and can circumvent the “ price manipulation ” problem that the Securities Regulatory Commission is worried about to a certain extent. At the same time, it also eliminates a series of on-chain operations such as private key storage. Compared with spot ETFs, this is a relatively more suitable solution.
At the Aspen Forum in August this year, SEC Chairman Gary Gensler said, “I very much hope that my colleagues will review ETFs based on CME Bitcoin futures”, expressing their inclination towards futures ETFs. Bitwise Asset Management Chief Investment Officer Matthew Hougan also expressed a similar view. He believes that “the US Securities and Exchange Commission is now taking small steps to launch the Bitcoin futures market because it is a regulated market.”
Compared with the first approval of this ETF, the gray-scale action may be more worthy of our attention.
As the world’s largest Bitcoin trust fund, Grayscale’s every move has attracted attention for a long time. On October 19, Grayscale officially issued a public announcement indicating that it has passed the New York Stock Exchange’s High Growth Market (NYSE Arca) to The U.S. SEC filed relevant documents for the Bitcoin ETF.
If approved, the positions of GBTC share holders will be automatically converted into equivalent spot ETFs, and they will become ETF giants with tens of billions of encrypted assets. As of October 20, Grayscale still manages 647,500 bitcoins. It is worth about 38.7 billion U.S. dollars . In addition, Gray’s CEO Michael Sonnenshein also stated that he plans to convert 14 other crypto investment products into ETF products.
Grayscale trust fund holdings (partial)
In fact, as early as many years ago, Gray had filed an application for Bitcoin ETF to the SEC, but it was not approved in the end, and then turned to Bitcoin Trust. But now, with the advent of Bitcoin futures ETFs, the market share of “GBTC” will also face impact. Therefore, seeking Bitcoin spot ETFs can be said to be an inevitable defense and change made by Gray in the face of changes. It does not rule out the possibility that they will seek to launch Bitcoin futures ETFs in second place.
Today, not only ProShares and Grayscale, but also Invesco, Valkyrie Investments, and the ARK fund owned by Cathie Wood, which is known as the female stock god, have submitted applications for Bitcoin ETFs to the SEC. October 20, asset management company VanEck launched Bitcoin futures ETF officially been approved by the SEC in the United States, and allow it to launch the fund after October 23 , a surrounding Bitcoin ETF’s “war”, but also This ignites.
As for Bitcoin spot ETFs, from the current attitude of the US SEC, the probability of liberalizing Bitcoin spot ETFs in the short term is not high, and futures ETFs will still be the mainstream for a long time in the future.
But as Douglas Yones, head of product at the New York Stock Exchange said, “The ProShares Bitcoin futures ETF is an exciting step, but it will not be the last step.” Regardless of the form of the Bitcoin ETF, its fans For those of you, it doesn’t matter.