The launch of the first Bitcoin futures ETF in the US in October was a positive development for the cryptocurrency ecosystem, but such products are not suitable for long-term investments. This is the opinion of CIO Bitwise Matthew Hoogan expressed in Scott Melker’s podcast.
“We did see billions of dollars coming into the market, probably having an impact on the price increase. 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 called the narrative that Bitcoin ETFs “would open the flow of money from Wall Street” to the industry as false.
Cryptocurrency futures ETFs are more risky than spot ETFs, he said. Due to volatility, the product implies increased maintenance costs and is not the optimal solution for institutional investors to enter the market.
Hugan noted that bitcoin futures exchange-traded funds do not offer investment attractiveness to financial advisors who manage most of US private equity.
A trade-off: how the launch of bitcoin futures ETFs will affect the cryptocurrency market
However, CIO Bitwise sees the product as a positive example of industry-to-regulator engagement. He also called it good practice for industry representatives to meet with authorities and legislators to discuss the development of the crypto space.
Hugan believes that the next bull market will be associated with favorable legislative changes, and it will happen sooner than everyone expects.
As a reminder, the SEC “tacitly” approved the prospectus for the Bitcoin futures ETF from ProShares on October 15. The fund’s shares started trading on the New York Stock Exchange on October 19.
Next, the regulator allowed trading in similar products from Valkyrie Investments and VanEck. The regulator rejected the application of the latter to launch an ETF based on the spot price of a cryptocurrency in December.
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