Is a Bitcoin Spot ETF on the Horizon?

A recently approved Bitcoin futures ETF may have paved the way for a spot ETF. Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.

Last year there were many companies applying to be the first to get approved for a spot Bitcoin ETF. The SEC was not ready to let that happen. However, they did approve a couple of future pegged ETFs. The first of which to be approved in the US was ProShares Bitcoin Strategy ETF. This was a huge step in the right direction to further adoption.

This allows investors who would otherwise not be able to get exposure to cryptocurrency a chance to diversify their portfolios. A lot of investors that have been in the game for a while may be warry about creating an account for a crypto exchange, like Coinbase, because it is new and they do not trust it yet.

Some investors have been with their current brokers for years and have established a level of trust. That coupled with the fact that crypto is not FDIC insured definitely detracts some people.

The next step would be to get a BTC spot ETF approved which would allow investors to trade on their current exchange almost the same as they would on Coinbase. The SEC has been reluctant to approve a spot ETF sighting that it is too volatile and prone to market manipulation. Most recently, Teucrium was approved for futures ETF but it was approved under a different filing than the ones before it.

Previous futures ETFs had been approved citing the 1940 Act protections, but this one was approved under those from 1933. “With the approval of the Teucrium ETF, the SEC just killed their own argument on that front,” said Geraci of ETF Store. He also thinks that this could start a wave of new spot ETF applications.

While this is optimistic news it does not mean that we will be getting one anytime soon. It is approved under different filings but that may not exactly change the SEC’s current stance on a spot ETF. In the near future we may get these but as it currently stands, cryptocurrency as a whole probably needs more regulation before a body like the SEC approves things of this nature.