The spot-ETF rally
Major players in traditional finance, including BlackRock, Invesco, and Fidelity, have recently submitted applications for spot-based bitcoin ETFs to the SEC. In June, Bitcoin experienced a rally of nearly 12%.
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If approved, a spot-based ETF would resemble the SPDR Gold Trust ETF, providing investors with the ability to hold positions indefinitely and avoiding the rollover costs associated with futures ETFs. It would also offer a closer tracking of Bitcoin's spot price compared to futures-based ETFs.
Consequently, spot-based ETFs are seen as a superior investment option to underperforming futures-based products like ProShares' Bitcoin Strategy ETF, which has lagged behind Bitcoin's performance this year. The popularity of spot-based ETFs is further fueled by the fact that futures-based ETFs, such as ProShares' BITO, have exhibited limited upside and suffered losses during the bear market of 2022. The elevated premiums in futures contracts, influenced by the influx of buyers into the derivatives market during Bitcoin's rally, contribute to the demand for spot-based ETFs.
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