Seeking Alpha 2022-07-01 09:35:00

Crypto Logs: Bitcoin ETFs Vs. Index-Based Crypto ETFs

Many investors are choosing to access Bitcoin through traditional ETF wrappers due to their relative simplicity and familiarity.Futures-based Bitcoin ETFs track Bitcoin futures rather than an underlying index of equities.Spot Bitcoin ETFs already exist in other geographies including Europe, Canada, Australia, and Brazil.This month, U.S. digital asset investment products saw net inflows, suggesting that some U.S. investors are using the selloff in Bitcoin prices as an opportunity to buy.(1) Many investors are choosing to access Bitcoin through traditional ETF wrappers due to their relative simplicity and familiarity. But the Bitcoin ETF industry is still very new and evolving, with several game changing headlines this past month. Last week on June 21, the ProShares Short Bitcoin Strategy ETF (BITI) launched as the first inverse Bitcoin ETF in the U.S. (using an inverse futures strategy). And on June 29, the SEC rejected Grayscale's application for converting its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. Given this current environment, this note reiterates some of the key differences between crypto-related ETFs including index-based ETFs of crypto equities, futures-based Bitcoin ETFs, and spot-based Bitcoin ETFs.Index-Based Crypto Equity ETFs – High Correlation To Bitcoin In Addition To Long-Term ThemesIn a survey by Bitwise and ETF Trends (now a part of VettaFi) advisors were asked if they would rather invest in a...

Crypto Logs: Bitcoin ETFs Vs. Index-Based Crypto ETFs

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