Why Didn’t Crypto Investors Sell All Bitcoin Futures ETFs?
The Securities & Exchange Commission begins trading in the US Bitcoin (BTC) futures exchange-traded reserves next week, as the SEC is dubious to block ETFs proposed by Invesco and ProShares, as per CNBC Friday’s report.
However, Mark Cuban, a Billionaire, won’t be investing.
When enquired if he will buy the BTC ETFs in the US once they are listed officially, Mark Cuban told CNBC replied, “No, I can buy Bitcoin (BTC) directly.”
Due to his algorithmic scarcity, he used to call Bitcoin “better gold than gold” because only a partial lot exists naturally.
Cuban sees more promise in BTC as a stock of value than as a digital currency. “This is why I own Bitcoin and have never sold it,” he said in April 2021.
Cuban also has an extensive cryptocurrency portfolio that includes digital currencies such as Ether, Dogecoin, Bitcoin, and other Altcoins; NFT; and successful decentralized crypto companies. However, advocates of the BTC futures ETF claim that it could offer returns over directly buying Bitcoin.
Whereas a physical ETF grasps the underlying digital assets or decentralized securities, on which its market value relies. ETF, a BTC futures track potential contracts, provides exposure to the digital asset without owning them. In this scenario, a BTC futures ETF would hold Bitcoin and its value, while a futures-based Bitcoin ETF would replicate Bitcoin futures contracts.
With a futures-based Bitcoin ETF, investors can invest in the digital currencies in their range without owning them. This feature is helpful for the ones who want to trade on bitcoin without future risks and its mitigations, or who prefer not to take responsibility for protecting and fortifying their BTC wallet. The BTC value also tends to fluctuate, so a crypto investor will have to endure the volatility of its value.
The ETFs proposed by Invesco and ProShares look for futures crypto contracts and keep an eye on the shared fund guidelines that SEC’s Chairman, Gary Gensler has required of all potential futures-based Bitcoin ETFs.
However, futures Bitcoin of ETFs would also carry unique threats, including sophisticated costs and unavoidably tracking the value of such digital assets and values.
“The ETF value can never meet the value of BTC. Consequently, it’s perhaps better for short-term exposure in the crypto world rather than the long-term buying of digital assets and holding them for a long time in order to acquire a high value,” said Todd Rosenbluth, CFRA director of ETF and mutual fund research.
Regardless of crypto and its financial experts, most advise that investing in cryptocurrencies such as Bitcoin is risky and may cause losses due to its volatility. Not only value fluctuations, but its speculative nature also has major impacts on its value.
So experts suggest investing the amount which you can lose with no hard loss.