Despite a surge in new listings, investor appetite for Ether futures exchange-traded funds remains muted.
Six new Ether futures funds from Bitwise Asset Management, ProShares, and VanEck were launched on October 2nd. All six funds have posted losses of 5% or more since their debut.
Rick Edelman, founder of the financial experts Digital Asset Council, told Bob Pisani on CNBC’s “ETF Edge” on Monday that the broader outlook for cryptocurrencies is partly to blame.
“when [the ProShares Bitcoin Strategy ETF (BITO)] “We generated $1 billion with the launch of Bitcoin futures because it was brand new,” Edelman said, adding, “Frankly, at that time in 2021, Bitcoin was a great performer. “But many people didn’t understand exactly what the fund was.” , Bitcoin futures. Fast forward a few years and people have learned a lot. ”
The six Ether futures funds that debuted on October 2 raised a total of just $1.92 million on their first day of trading, according to LSEG. When the BITO ETF, a futures product based on Bitcoin, was launched in late 2021, it received approximately $1 billion in inflows in the first two business days alone.
The cryptocurrencies underlying futures-based products are still far from the all-time highs reached in November 2021. Bitcoin It is currently hovering around $27,000, more than $40,000 below its peak. ether It’s down more than 60% from its high and is currently valued at nearly $1,500.
Edelman added that the nature of futures ETFs may keep some investors on the sidelines.
“People are realizing, “I don’t normally buy futures, so if I don’t buy futures in the stock market, why should I buy futures in the cryptocurrency market?”
Regulators are currently considering approving crypto spot ETFs that trade based on the current market price of the underlying assets rather than futures contracts.
The Securities and Exchange Commission has previously blocked spot Bitcoin ETFs from entering the market, but a federal appeals court in August overturned a ruling that blocked Grayscale from converting its Bitcoin ETF. Grayscale Bitcoin Trust (GBTC) Invest in ETFs. The SEC has until Friday to appeal the decision.
Consumer safety is at stake, Edelman said.
“The lack of a spot Bitcoin ETF isn’t stopping people from buying crypto; it’s just forcing them to pay for exotic products that are more expensive, less liquid, and more risky.” he said.
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