Anna Paglia, a senior executive at Invesco, explained that her company withdrew the application for its Bitcoin Futures ETF due to the SEC’s rules.
Bitwise Asset Management pulled its filing for futures-based ETFs, citing that it was not a good decision for the long term.
Invesco Gave Its Explaination
Invesco, an American investment company with assets in excess of $1.5 trillion under management, filed with the Securities and Exchange Commission in August to launch two cryptocurrency-based ETFs.
A few months later, the company pulled its applications hours before the Bitcoin Futures ETF was due to go live. It failed to justify its decision.
Invesco’s Global Head of ETFs & Indexed Strategies, Anna Paglia, explained in a recent interview that such a product would be too costly for investors. According to her, these SEC rules would result in a Bitcoin Futures ETF Contango. This would mean that futures contracts prices would be higher that spot. Investors would suffer.
ETFs that have 100% exposure to bitcoin futures contracts are allowed by the Commission. This is not what Invesco intended.
“We didn’t think they would be as effective as they were when they were 100 percent of the product.”
The executive instead revealed that her ideal portfolio consisted of futures contracts and physical bitcoin. Swaps, ETFs and private funds invested in the bitcoin sector. She stated that investors would be protected in the event of liquidity shortages.
Our decision was influenced by our inability to dot. We learned more about the market and space and realized there were better ways to provide this exposure than going ahead and giving investors something they didn’t expect from Invesco.
Anna Paglia, Source ESG
Matt Hougan, Chief Investment Officer at Bitwise Asset Management, gave similar reasons for his company’s decision to halt the launch of a futures-based BTC ETF. He feels that such a product would be too costly for investors and not suitable for long-term investment.
They can be fine if you’re making a short-term investment. There are better options for long-term investors.
On October 19, 2018, the first Bitcoin Strategy futures-backed ETF was launched. This was a significant achievement for the cryptocurrency industry, as such a product had never existed in the USA before.
BITO was the second most traded fund in history, with more than 24,000,000 shares changing hands.
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