Like the value of Bitcoin itself, these ETFs are highly volatile. A Bitcoin futures ETF is an exchange-traded fund composed of assets related to Bitcoin's price. They are traded on a traditional exchange instead of a cryptocurrency exchange. Currently, the underlying assets within Bitcoin futures ETFs are Bitcoin futures contracts.
What is a bitcoin spot ETF?
In a futures ETF, traders don't own any bitcoin. Instead, they only need to enter an agreement about the price of bitcoin on a certain date in the future. Whereas a Bitcoin Spot ETF requires investors to actually buy Bitcoin, which they can later sell as they wish.
Are Futures a safe option for bitcoin exchange-traded funds?
SEC Chair Gary Gensler is on the record stating that given the novel character of cryptocurrency, relying on the proven and highly regulated futures market is a much safer approach for Bitcoin exchange-traded funds. Futures are an agreement between two parties to sell a particular asset at a future date.
Do bitcoin ETFs own bitcoin?
None of the six ETFs on our list own actual Bitcoin. Instead, they hold Bitcoin futures contracts, and in some cases the shares of companies and other ETFs active in the cryptocurrency space. Bitcoin ETFs don’t own Bitcoin because the SEC is concerned that BTC is traded on non-regulated cryptocurrency exchanges.
