The third SEC-approved Bitcoin Futures ETF was launched on Tuesday on the Chicago Board Options Exchange (CBOE). Listed as XBTF, it had a good debut on the exchange, despite the cryptocurrency market being hit by sell-offs for days.
The debut of VanEck’s third Bitcoin ETF
This isn’t the ETF directly linked to spot Bitcoin that VanEck also proposed, which is unlikely to be approved by the SEC, as the company’s director of digital assets, Kyle Da Cruz, asserted:
“While a ‘physically backed’ bitcoin ETF remains a key goal, we are very pleased to be providing investors with this important tool as they build their digital asset portfolios. Cost and tax treatment are two essential considerations for investors, and we have made both front and center in the design of XBTF. Investors deserve lower cost, transparent, regulated bitcoin exposures, and we’re pleased to be leading that charge with the launch of XBTF and all of our ongoing efforts in the bitcoin and digital assets space”.
XBTF brings competitive costs and tax advantages that make it very attractive to investors, especially at a time when there is a lot of talk about tax and regulatory compliance for digital assets.
The first Bitcoin ETF was the one issued by Proshares (BITO), which was launched on October 19. BITO’s total assets under management soared to a record $1 billion in less than two days, aided in part by the new ATH reached by Bitcoin during that period.
Volumes of $4.8 million
The new ETF on its first day of trading hit $59.73 for a total traded volume of about $4.8 million, well below the record $1 billion achieved by Proshares and the $78 million achieved by Valkyrie’s first ETF, as noted in a tweet on November 17 by Eric Balchunas, senior ETF market analyst at Bloomberg:
$XBTF traded about $5m on Day One. Normally that would be pretty good, prob Top 10% of launches this year. It's just shadowed by the absurd $1b $BITO laid down, not to mention $78m that $BTF did. pic.twitter.com/bjqrUnThzr
— Eric Balchunas (@EricBalchunas) November 16, 2021
Balchunas, while noting that it’s one of the top 10 ETF market debuts this year, notes that it’s a far cry from the results achieved by the two BTC ETFs that preceded it.
The growing market for Bitcoin ETFs
There are at least 20 Bitcoin ETFs under scrutiny by the SEC, half of which are linked directly to the most popular cryptocurrency. It is unlikely that they will see the light of day since the president of the American stock exchange’s control authority has made it clear that he does not look favourably on such a risky and not fully regulated product.
According to many analysts, the ETF race will not stop, as they are one of the tools that allow institutional investors to enter the cryptocurrency market. Many large funds cannot invest in products that are not fully regulated, such as cryptocurrencies.