Crypto Asset Manager Refiles Bitcoin Futures ETF

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Bitwise has submitted a fresh application to launch a Bitcoin futures ETF.
Its proposed fund would engage in Bitcoin futures contracts exclusively through a wholly-owned Cayman Islands subsidiary.
ProShares introduced the first Bitcoin futures ETF in the U.S. last October.

Bitwise, a leading cryptocurrency asset manager, has resubmitted paperwork to begin trading a Bitcoin futures exchange-traded fund (ETF). By way of a Cayman Islands-incorporated wholly-owned subsidiary, the proposed fund would make solely Bitcoin futures contract investments, according to a Securities and Exchange Commission (SEC) filing on Nov.23.

As a result of the high price tag and complexity of the proposed product, Bitwise withdrew its application back in November 2021. The initial proposal submission happened back in September last year.

Bitwise re-files a Bitcoin futures ETF, starting from scratch and with their own ETF trust

Bitwise Bitcoin Strategy Optimum Yield ETF$BITC | fees tba | eff Feb 6

“Yield” in this case is referring to the futures “roll yield” and not distribution yield.

— ETF Hearsay by Henry Jim (@ETFhearsay) November 23, 2022

Bitcoin Futures ETF Applications

Many in the cryptocurrency industry consider October 19, when ProShares introduced the first Bitcoin futures exchange-traded fund in the United States, to be a turning point.

On its first day of trading, it surpassed $500 million in volume, making it the second most actively traded fund in history.

Shortly after, Valkyrie introduced a similar product, making it the second crypto exchange-traded fund to obtain Securities and Exchange Commission approval.

On the Flipside

Despite the fact that the ProShares Bitcoin Strategy ETF (BITO) was an instant hit when it debuted, interest in the product has since waned due to the sharp decline in the value of Bitcoin and other cryptocurrencies.
After losing over 70% of its value in its first year of trading, BITO is now deemed one of the worst-performing ETFs ever.
The SEC has approved Bitcoin futures exchange-traded funds (ETFs), but they have not approved a spot-based product due to persistent fears of market manipulation. The securities commission has rejected Bitwise’s request to launch a spot Bitcoin ETF.

Why You Should Care

ETFs that track Bitcoin futures prices provide investors exposure to Bitcoin’s fluctuating value without requiring them to actually purchase Bitcoin. The introduction of bitcoin ETFs and bitcoin futures ETFs may aid in accelerating growth in both bitcoin and gains across the cryptocurrency industry, given that the positions of many other digital currencies are closely correlated with that of the original cryptocurrency.

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