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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.

Additionally, Bitcoin futures ETFs had already consumed all available capacity at futures commission merchants. The company’s CEO said this could ease over time. However, it’s another expense at the moment.

"The result? Costs on top of costs, plus added complexity," he said.

SEC keeps refusing these products requests

ProShares (BITO) and Valkyrie (BTF) were the first to get futures ETFs accepted by the Securities and Exchange Commission. They started trading in October, offering investors wider exposure to Bitcoin without actually holding the coin.

"None of this means that futures-based ETFs are bad, and $BITO and $BTF are thoughtful versions," Hougan said.

"But we believe most long-term investors would be better served by spot exposure."

Bitwise added it would aim for a spot Bitcoin ETF. The company filed for a Bitcoin spot ETF on Oct.14 with the New York Stock Exchange, according to another Twitter post from Hougan.

"Ultimately, what many investors want is a spot bitcoin ETF. We think that's possible," Hougan said.

He added that the 1st Bitcoin spot ETF was filed in 2013. As of this writing, the SEC has rejected all applications for these products. In January, Valkyrie applied to list spot Bitcoin fund. However, the SEC extended the deadline to January 7, 2022.

Meanwhile, several asset managers and financial institutions are still waiting for approval including: US investment group Stone Ridge, WisdomTree, asset manager and SkyBridge hedge fund to name a few, according to Decrypt.