May. 09, 2022
As one who has been in the investment securities business in some capacity most all of my long life, I can not fathom why the SEC would allow future based Bitcoin ETF's, but not ETF's based on the actual asset. This makes no sense. Investors want to buy assets conveniently and cheaply.without having to worry about contagion and other market forces that move the futures contracts away from the spot market. Nor do they want to rely on the manager's skill at rolling the futures contracts. In fact, market makers know the timing of the rolls, and price contracts accordingly, effectively front running, which makes futures based ETF's poor investments over the long term. Spot, or physical ETF's don't have these problems. Assets are bought and held, only having to sell to meet redemptions. Bitcoin transactions are liquid, efficient, and transparent. There simply is no rational reason for disallowing the existence of a spot Bitcoin based ETF, other than it would provide competition for the existing futures based ETF's which I know they don't welcome. I'm sure the SEC will eventually see the light on this matter. Hoping it is soon, William T. Melms Retired Investment Advisor