Bitcoin ETF Dilemma: Spot Markets, Futures Face Off In Crypto Arena

As Spot Bitcoin ETFs loom, the market is watching the potential impact on existing Bitcoin BTC/USD futures markets.

What Happened: ProShares Global Investment Strategist, Simeon Hyman noted in his Wednesday interview with Bloomberg TV’s Katie Greifeld that Bitcoin futures ETF products were the fastest to launch with $2 billion assets under management. In the past year, they attracted inflows of $600 million to rank in the top 5% of all ETFs in valuation.

According to Hyman, crypto futures markets are more mature, liquid and regulated compared to their spot equivalents. Hyman called spot markets "weird" and influenced by factors like FTX Binance and "stuff."

Futures markets are bolstered by high trading volumes and tight spreads, while the same does not always apply to spot markets, he added.

It remains unclear whether futures markets will become obsolete once institutional and retail investors can access the cryptocurrency itself through spot ETFs.

Some of the Futures ETF Bitcoin are ProShares Bitcoin Strategy ETF BITO, VanEck Bitcoin Strategy ETF XBTF, and Valkyrie Bitcoin and Ether Strategy ETF BTF.

Expert Opinions: Nate Geraci, president of The ETF Store, pointed out that Hyman was not particularly enthusiastic in his support for the upcoming spot funds. “No surprise, but ProShares (who’s behind by far the largest bitcoin futures ETF) isn’t exactly offering a ringing endorsement of spot bitcoin ETFs…Will be interesting to see what happens to BITO if & when spot bitcoin ETFs launch,” Geraci tweeted.

Whale Wire, a source for crypto news, warned that excessive retail hype from approval rumors risks inflating prices to unsustainable levels, as occurred when CME launched Bitcoin futures in late 2017.

Now Read: Bitcoin Boom Or Bust? Investor Surge Meets Analyst Caution Over ETF Risks

Photo: Shutterstock