LONDON, Nov. 23, 2021 /PRNewswire/ -- Huobi Research
Institute, the leading blockchain application research house, has
published its latest research report titled "Bitcoin Futures ETFs:
A Dive to Product Features".
Medium Link:
https://huobiresearch.medium.com/bitcoin-futures-etfs-a-dive-to-product-features-aa65cdb7321f
The first batch of U.S. "nominal" Bitcoin ETFs, BITO and BTF,
finally launched in October 2021.
Market sentiment has been highly positive, leading the CME Bitcoin
Futures' open interest to rise 49% and reach a historic high of
$5.45 billion in net worth. Up to
November 2, BITO (ProShares) had
achieved an exposure value of over $1.28
billion, nearly 24 times greater than BTF (Valkyrie) which
launched merely 2 days later, demonstrating a huge market advantage
for "early birds".
Key Highlights of the Report
A comparison of 6 Futures ETF filings shows:
- Futures ETFs share similar properties, and their competition
may lie in fees (i.e. 0.95% of BITO and 0.65% of VanEck), and
directions like short exposure.
- Active management attributes include rolling and
diversification. BITO and BTF held 34.35% and 49.97% of Bitcoin
Futures respectively; the latter held front-month contracts
only.
Futures ETFs VS Spot Products (ETPs/ETNs):
- Futures ETFs allowed two-way cross-market trading, enabling
flexible strategies for institutional arbitragers.
- Futures ETFs provide liquidity expansion that does not require
the circulation of Bitcoins.
- CME position has limits of 4,000 for front-month and 5,000 for
overall.
- Potential contango risks in futures may result in extra
internal costs, 10.91% for current annualized spread, and an
average of 5%-10% overall.
- A 25%-35% tax rate applies for unrealized gain in futures,
which is much higher than spot products.
We believe the launch of futures ETFs is a milestone for the
crypto industry and financial markets. It is a compromise SEC has
made in adapting to the rising market demand; more futures-based
products are on the way. Additionally, futures ETFs may create a
new channel for the discovery of Bitcoin's fair value.
Looking forward, we expect the crypto asset management market to
face a rat race that will lead to an increase in arbitraging
activities in the short run due to the nature of the product. In
the long run, we believe Bitcoin futures ETFs could be the bridge
to the launch of spot ETFs. The current gap could be an opportunity
for crypto-friendly countries in the EU and Asia, especially the UK, Germany, Switzerland, Singapore, and Malaysia.
About Huobi Research Institute
The Huobi Blockchain Application Research Institute (referred to
as "Huobi Research Institute") was established in April 2016. Since March
2018, it has been committed to expanding research and
exploration of the many different fields within the blockchain
industry. The institute's goal is to accelerate the research and
development of blockchain technology, promote new applications in
the blockchain industry, and improve its ecosystem. Its research
reports cover industry trends, technology directions, innovative
applications, exploration of different models, etc. Based on its
principles of public service, rigor and innovation, Huobi Research
Institute partners with governments, enterprises, universities and
other institutions to build a research platform that can cover a
complete chain of industries under blockchain. Its industry
professionals use solid theories and analyses of evolving trends to
promote the healthy and sustainable development of the entire
blockchain industry.
Contact Huobi Research Institute:
Consulting
email:
research@huobi.com
Twitter:
@Huobi_Research
https://twitter.com/Huobi_Research
Medium:
Huobi
Research
https://medium.com/@huobiresearch
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SOURCE Huobi Research