Bitcoin Futures ETFs are so Expensive says Bitwise Asset Management

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Matt Hougan
Matt Hougan

Bitwise Asset Management, a crypto index fund manager has revoked its application for a Bitcoin futures exchange-traded fund, according to a Twitter announcement by its chief investment officer on Wednesday.

The company’s CEO Mathew Hougan, the company decided to withdraw its request from the regulator for two reasons. On one hand, they said that it would underperform spot Bitcoin since “bitcoin futures have historically traded in contango,” Hougan said in a Twitter post.

According to Hougan’s earlier tweet, “contango” is a term used when the futures price is higher than the spot Bitcoin price. The company’s analysis showed contango could cost investors 5-10% per year before compounding.

On the other hand, Bitcoin futures ETF is costly. The U.S.-based company argued that it’s possible to hold both futures and Canadian-listed bitcoin exchange-traded products in a 1940 Act ETF, Hougan said.

“Tax laws make it costly to gain 100% exposure to futures, so flexibility could have lowered costs. Unfortunately, that’s not permitted (at the moment),” he said.