The U.S. market has just witnessed the launch of futures-linked Bitcoin ETFs in the market. However, there’s been an increased demand for spot Bitcoin exchange-traded funds, which directly tracks the underlying asset class, from institutional players as well as lawmakers.
Speaking at the Bloomberg Financial Innovation Summit on Thursday, November 4, Bitcoin evangelist and MicroStrategy CEO Michael Saylor said that the Bitcoin ETFs will storm the financial markets over the next three years.
Besides, Saylor also added that Bitcoin ETFs will entirely replace Gold ETFs during this period. The MicroStrategy CEO said that Bitcoin will emerge as the primary asset class for the Western world and will eventually replace the $425 billion fund – SPDR S&P 500 ETF Trust, ticker SPY – tracking the equity index. Saylor further added:
“To do that, you need the spot ETF. And once these spot ETFs roll, I think you’ll see billions, then tens of billions, then hundreds of billions, then trillions of dollars flow into them.”
Futures-Linked Bitcoin ETFs Are Inferior Offerings
Although we have two Bitcoin Futures ETFs – ProShares and Valkyrie – already trading in the market they won’t be as good an option to institutional players as the spot offerings. Saylor said that futures-based Bitcoin ETFs are inferior offerings but something is better than nothing.
Saylor further added that ETFs are the right choice for institutional as they provide a regulated framework for the big players to participate in the asset class. Saylor sees trillions of dollars of institutional money coming to Bitcoin ETFs over the coming years.
Nic Carter, the co-founder of Coin Metrics, also said that the futures-based products are inferior. He noted:
Spot Bitcoin ETFs would be “the hottest commodity ETF launch of all time, attracting probably well over $100 billion in assets within a month or so”.
Carter noted that spot Bitcoin ETFs are already trading successfully in other countries like Canada. He added: “They work just great. There’s no explanation for the reticence at the top levels here to approve this product, which obviously should exist and would make life immensely easier for all types of different investors”.
Earlier on Wednesday, two U.S. Congressmen penned a letter to the U.S. SEC Chairman Gary Gensler proposing him to approve the spot Bitcoin ETF explaining why they are more investor-friendly over their futures-linked counterparts.