What is the chance of approving a spot BTC ETF?
3 min read
Bloomberg analyst Eric Balchunas assessed that BTC Futures ETF from ProShares remains a popular choice for traders. In terms of total trading volume, it still ranks among the top 2% of all ETFs.
Eric Balchunas noted that the ProShares BTC Futures ETF (BITO) traded shares worth approximately $ 400 million on Wednesday, with its average volumes still ranking in the TOP 2% of all US ETFs.
In the last 9 days, the ProShares BTC Futures ETF has seen a combined inflow of approximately $ 112.79 million. Although this figure is a significant departure from the record highs ($ 567 and $ 489 million, respectively), Balchunas has assessed that such a consistent cash flow is very rare for newly launched ETFs.
$ BITO and $ BTF both had their biggest volume days in about two weeks. $ BITO with a $ 400m traded, which is not only a ton but = 25% turnover in one day- indicating its usage as a trading tool. pic.twitter.com/ukDGeSEa6F
– Eric Balchunas (@EricBalchunas) November 10, 2021
Approval of the spot ETF does not give a chance
Although investor interest in BTC Futures ETFs exists based on these numbers, Balchunas gives almost no chance to the early approval of the spot BTC ETF by the US Securities and Exchange Commission (SEC).
A Bloomberg analyst said the SEC was most likely to reject VanEck’s request, which he must comment on no later than November 14. The probability of a permit is estimated at a very skeptical 200 to 1.
The SEC has 100 hours left until they have to approve or deny the VanEck spot BTC ETF (my guess is they drop it Friday after mkt close but who knows). While our odds of approval are a bleak 200-1 the denial statement could offer some clues as to when it could happen @JSeyff https://t.co/Y2n3qPAvIp
– Eric Balchunas (@EricBalchunas) November 10, 2021
Is the Market Futures ETF enough?
In an interview with USNews & World Report on Tuesday, ProShares investment strategist Leks Gerkal indicated that Futures BTC ETFs may now be fully suitable for investors. Allegedly because the fixed price of BTC is still difficult to estimate.
“There is no single reference price for bitcoins. The traded price of BTC often varies between 1 and 2% and sometimes as much as 4 or 5 percent between individual exchanges. Expert research on this topic has found that the BTC futures market dominates the pricing process, ” stated.
However, the view that BTC Futures ETFs are better than spot BTC ETFs is far from shared by everyone. In general, the demand for a spot ETF is huge, and many the U.S. Securities and Exchange Commission (SEC) blame it for not yet allowing it, even though it has given its consent to derivative ETFs.
Recently, US Congressmen Darren Soto and Tom Emmer even addressed an open letter to SEC chief Gary Gensler, asking him to approve the spot ETF. “We ask why, if it suits you to allow ETF trading on the basis of derivative contracts, it is not the same or more convenient to allow ETF trading on the basis of spot prices. BTC spot ETFs are asset-based, which in essence gives investors more protection. ” they wrote.
