Bitwise CEO Matthew Hoogan believes Bitcoin futures ETFs are not suitable for HODL investors.
Bitwise CEO Matthew Hougan believes ProShares’ launch of the BITO futures fund is important to the ecosystem as it signals growth and massive capital inflows. However, he claims that this is an imperfect tool for long-term investments due to additional costs.
“This is not the best product, very few people like it. It is fine if you trade bitcoin for a week, but not as good if you hold it for a year. It’s just not a Hodler product. The story that ETFs will allow institutional capital to flood into the market is a lie. “
Hugan noted that investing in bitcoin futures ETFs, i.e. BTC price change contracts, is more risky than bitcoin spot ETFs. This fact casts doubt on the intention of the Securities and Exchange Commission (SEC) to “protect investors.”
According to the head of Bitwise, the main disadvantage of futures ETFs is the lack of investment attractiveness for financial advisers who control most of the American private capital. They “just won’t buy cryptocurrency on a mobile app for their clients.”
Hugan noted the positive aspects of implementing Bitcoin ETFs. At that time, Bitcoin futures ETFs were the only instrument that met the requirements of the regulator and the market, he said. But it can hardly be called the optimal solution for institutional investors to enter the cryptocurrency market. This instrument is more volatile, which implies increased maintenance costs and periodic “switching” to the next futures.
The Bitwise CEO believes the launch of bitcoin futures ETFs is a good sign as regulators still don’t fully trust ETFs that emerged as an investment product back in 1993. According to Hugan, futures ETFs are a great example of how the crypto industry’s interactions with regulators can move forward.
“It doesn’t have to always help. But through persistent lobbying, facts and analysis, you can ensure that the future you are aiming for is perceived by the authorities as normal. ”
According to Hugan, it is a good practice for representatives of the crypto industry, lawmakers and regulators to come together at hearings in the US Congress and discuss the development of the industry, as the role of the state in the cryptocurrency market grows every year. Hugan emphasized that the next bull market for cryptocurrencies will be driven by positive legislative changes. In his opinion, it will come earlier than expected.
Many experts agree that Bitcoin futures ETFs are less profitable for investors compared to direct funds. DeFi Unchained Capital CEO Parker Lews believes that a BTC exchange-traded fund (ETF) will be disadvantageous to investors as investors take on market maker risks when buying ETF shares.
Earlier, JPMorgan said that direct buying of BTC is more profitable than a Bitcoin futures ETF, as it has a drawback that will lead to a decrease in its profitability if too many assets are invested in the fund.
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