In Bitcoin’s case, a Bitcoin ETF is an asset that simply tracks the price of Bitcoin.
However, this ETF doesn’t invest directly in the asset, but in Bitcoin futures exchange-traded funds as an alternative, making ProShares’ offering more of a “false” ETF.
A Bitcoin futures ETF is an agreement in which one will buy or sell Bitcoin at a specified price on a pre-determined date.
Why would one choose to buy Bitcoin on a future date despite the asset’s volatility? It’s because they have reason to believe that Bitcoin’s price will be lower by then, and the entire process is carried out by the platform rather than the user.
Sure, one could simply just buy any amount of Bitcoin at any time without ProShares but a futures ETF ensures that users can invest in digital assets without inconveniencing themselves via exchanges.
Also, companies that offer a Bitcoin futures ETF may charge annual fees to keep contracts and accounts open.
A spot Bitcoin ETF brings all the benefits of a futures ETF, such as investing in Bitcoin without using an exchange, paying less in fees than on a crypto exchange, and streamlining the process overall.
However, as of now, there’s no such thing as an actual Bitcoin spot ETF due to the industry’s nascent nature.
For instance, Jay Clayton, who was head of the SEC from May 4, 2017, to December 23, 2020, is a fan of Bitcoin as a store of value.
Other ETF proposals, including those from Valkyrie and Van Eck, have also seen approval.
Grayscale, which holds the world’s only SEC-approved, publicly-traded Grayscale Bitcoin Trust , proposed its Bitcoin spot ETF to the SEC in 2016.
As of March 2022, Grayscale remains committed to converting GBTC to the world’s first Bitcoin spot ETF, even threatening to sue the SEC if its latest attempts don’t go through.
After all, a Bitcoin futures ETF might not involve buying in at Bitcoin’s spot price, but it streamlines the buying process and allows investors to bet on the market whether they choose to short it or otherwise.
While the only Bitcoin ETFs in existence are Bitcoin futures ETFs, there are quite a few out there in which one can choose to invest.
Providing users with exposure to Bitcoin futures ETFs, the VanEck Bitcoin Strategy ETF is listed on the CBOE exchange with the XBTF ticker.
There are various other Bitcoin futures ETFs on the market, but those mentioned previously are some of the most popular.