The October launch of the first futures-based Bitcoin ETF in the United States was a positive moment for the cryptocurrency ecosystem, but such products are not suitable for long-term investments. This view was voiced by Bitwise chief investment officer CIO Matthew Hugan in подкасте with Scott Melker.
“We really saw billions of dollars flow into the market, likely affecting price growth. However, this is an imperfect product. It is suitable if you trade Bitcoin for a week, but absolutely not if you hold the asset for a year or more,” he said.
Hugan dismissed the narrative that Bitcoin ETFs would open a flood of money from Wall Street into the industry.
In his view, futures-based crypto ETFs are more risky than spot ones. Because of the volatility, the product incurs higher servicing costs and is not the optimal solution for institutional investors entering the market.
Hugan noted that Bitcoin-futures-based exchange-traded funds do not present investment appeal to financial advisers who manage most of the US private capital.
However, Bitwise’s CIO sees the appearance of the product as a positive example of industry players engaging with regulators. He also called meetings between industry representatives and authorities and lawmakers a good practice for discussing the development of the crypto space.
Hugan believes the next bull market will be tied to favorable regulatory changes, and it will happen sooner than anyone expects.
Earlier, the SEC quietly approved ProShares’ futures Bitcoin ETF prospectus on October 15. Trading of the fund’s shares started on the New York Stock Exchange on October 19.
Subsequently, the regulator allowed trading of similar products from Valkyrie Investments and VanEck. The regulator in Decemberrejected the latter’s application to launch an ETF based on the spot price of the cryptocurrency.