Huobi Research Institute, the leading blockchain application research house, has published its latest research report titled “ ETFs: A Dive to Product Features”.

The first batch of U.S. “nominal” ETFs, BITO and BTF, finally launched in October 2021. Market sentiment has been highly positive, leading the CME Bitcoin Futures’ open interest to rise 49% and reach a historic high of $5.45 billion in net worth. Up to November 2, BITO (ProShares) had achieved an exposure value of over $1.28 billion, nearly 24 times greater than BTF (Valkyrie) which launched merely 2 days later, demonstrating a huge market advantage for “early birds”.

Report Highlights

The following table compares 6 Futures ETF filings

• Futures ETFs have similar properties and may be competing in terms of fees. 0.95% and 0.65% respectively of VanEck), as well as directions such short exposure.
• Rolling and diversification are two of the active management attributes. BITO and BTF each held 34.35%, 49.97% and respectively Bitcoin Futures; BTF only held front-month contract contracts.

Spot Products ETFs and Futures ETFs:

• Futures ETFs enable cross-market trades in both directions. This allows institutional arbitragers to use flexible strategies.
• Futures ETFs allow liquidity expansion, without the use of Bitcoins.
• CME positions have limits of 4,000 front-monthly and 5,000 overall.
• Futures contango risk may lead to additional internal costs. Current annualized spread is 10.91%, with an average cost of 5%-10%.
• For unrealized gains in the future, which are much more expensive than those made from spot products, there is a 25-35% tax rate.

The launch of futures ETFs represents a significant milestone in the financial market and crypto industry. The SEC reached a compromise in responding to market demand. Futures products are also on the horizon. Additionally, futures ETFs may create a new channel for the discovery of Bitcoin’s fair value.

In the future, the cryptocurrency asset management market will be in a competitive environment that could result in an increase in arbitraging due to the product’s nature. We believe that Bitcoin futures ETFs will be the link to launch spot ETFs in the long-term. There could be a gap in market for crypto-friendly countries within the EU and Asia. This includes the UK, Germany and Switzerland.

FinancialNewsMedia.

EMAIL NEWSLETTER

You can also join the crypto-verse

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7]
It takes just 1 click to unsubscribe.

Continue reading on DailyCoin