There is a long-standing struggle to create a Bitcoin spot exchange-traded fund (ETF).
But why are investors unsatisfied with a Bitcoin futures ETF and still long for a spot ETF?
And more importantly, how does a Bitcoin futures ETF differs from a Bitcoin spot ETF?
What Is a Bitcoin Futures ETF?
A Bitcoin futures ETF issues publicly traded securities that offer exposure to the price movements of Bitcoin futures contracts.
Generally, incrypto futures trading, futures contract traders do not own the underlying asset they buy or sell.
They simply get into a contract to buy or sell at a specified date in the future.
Bitcoin futures ETFs grant such investors access to trade Bitcoin contracts without actually holding Bitcoin.
The contract is between two parties to exchange a contract unit, which is currently equivalent to five Bitcoin.
Many more have been approved since the first approval in 2021.
What Is a Bitcoin Spot ETF?
So what is a spot Bitcoin ETF?
Then, they can buy the ETFs on a standard securities exchange at the actual price of Bitcoin.
Exchanges likeCoinbase already report to the IRS, though.
How Do Bitcoin Futures and Spot ETFs Differ?
The major difference between a futures Bitcoin ETF and a spot Bitcoin ETF is ownership.
In a futures ETF, traders don’t own any bitcoin.
Bitcoin Futures ETF vs. Bitcoin Spot ETF: Which Is Better?
Since spot ETFs confer ownership, investors may prefer it to the futures Bitcoin ETFs.
However, both futures and spot Bitcoin ETFs offer investors some form of access to Bitcoin.
Investors can invest in spot Bitcoin ETFs and track their investments based on Bitcoin’s actual market price.
For spot Bitcoin ETFs, investors buy Bitcoin based on the current price.
Ultimately, it is up to the investor to choose.
Which Do You Prefer?
Always conduct your own due diligence and consult a licensed financial adviser for investment advice.
