Inventory of the world’s 12 largest Bitcoin spot & futures ETFs and market inspiration!

Bitcoin ETFs have long been anticipated in the crypto domain. Although the U.S. has been slow to approve spot ETFs, they have been listed for some time in Canada and Europe. This article summarizes the current status of the top 12 Bitcoin futures and spot ETFs. Based on "12 Largest Spot & Futures Bitcoin ETFs" by Miguel Benitez from CoinGecko, and compiled, translated, and written by Odaily Planet Daily.

Bitcoin ETFs have always been one of the most anticipated developments in the crypto domain. While spot Bitcoin ETFs are already trading in countries like Canada, Brazil, and Europe, a spot Bitcoin ETF for the U.S. market still faces regulatory hurdles.

However, in the U.S., there are several popular futures-based ETFs, and multiple applications for spot ETFs are awaiting SEC approval.

U.S. Bitcoin Futures ETF Review:

The ProShares Bitcoin Strategy ETF was the first Bitcoin ETF to trade on a major U.S. exchange, launching in the fourth quarter of 2021, coinciding with the peak of the bull market. Currently, this ETF holds 35,890 Bitcoins, making it the most established and largest fund in this area. Out of the top 12 Bitcoin ETFs, 2 (representing 16.6% of the total assets of Bitcoin ETFs) are managed by ProShares and can be traded in the U.S.

With the emergence of more and more ETFs and ETPs globally, the number of Bitcoins held by investment tools is increasing each year. In total, the top 12 Bitcoin ETFs hold 102,619 Bitcoins, slightly less than 0.5% of the total Bitcoin supply (21 million).

As ETFs rebalance regularly, the number of Bitcoins they hold varies with the coin's price. The frequency of ETF rebalancing can range from daily to yearly. For instance, the Purpose Bitcoin ETF (BTCC) rebalances once a month, while the S&P 500 index (SP 500) rebalances quarterly.

Who are the Top 12 Bitcoin spot and futures ETFs?

The Top 12 Bitcoin spot and futures ETFs available for trading are as follows:

Bitcoin ETFs outside the US

In fact, several countries have already approved spot Bitcoin ETFs that directly invest in Bitcoin before the U.S., with the leading spot Bitcoin ETFs including:

Purpose Bitcoin ETF (BTCC): Launched in February 2021, the Purpose Bitcoin ETF was North America's first spot Bitcoin ETF. As of September 2023, it currently holds over 25,000 Bitcoins. The ETF trades on the Toronto Stock Exchange and has always been very popular, with assets under management exceeding $1.1 billion.

3 iQ CoinShares Bitcoin ETF (BTCQ): Another Canadian Bitcoin ETF, it also trades on the Toronto Stock Exchange and held over 21,000 Bitcoins as of September 2023.

QBTC 11 by QR Asset Management (QBTC 11): The first Bitcoin ETF in Latin America, it was launched on the Brazilian Stock Exchange in June 2021. As of September 2023, the QBTC 11 ETF holds 727 Bitcoins.

The success of these Bitcoin ETFs demonstrates strong investor demand. Meanwhile, compared to Bitcoin's market value of around $1 trillion, the scale of ETFs undoubtedly has significant room to grow. This might also suggest that once a U.S. spot ETF is launched, the Bitcoin price will have substantial potential for growth.

What is the current status of U.S. spot Bitcoin ETFs?

While Bitcoin futures ETFs already exist in the U.S., the prospects for spot Bitcoin ETFs remain uncertain. One of the main reasons for the absence of spot ETFs in the U.S. is regulatory concerns. The SEC has repeatedly denied applications for spot Bitcoin ETFs, citing concerns about liquidity in the Bitcoin market, custody, and the potential for price manipulation.

However, recent applications from global asset management firms have been published in the Federal Register, moving one step closer to final approval. Some of these have been formally accepted for review and have initiated a three-week comment period. The following companies have applied for spot Bitcoin ETFs in the U.S.:

BlackRock, July 2023

WisdomTree, July 2023

Invesco/Galaxy, July 2023

Valkyrie, June 2023

Additionally, other major firms with existing futures ETFs have also joined the race to reapply for the U.S.'s first spot ETF, including VanEck and Fidelity. Companies that haven't reapplied after having their applications rejected include Global X, Kryptoin, and First Trust.

Another asset management firm, Grayscale, is currently awaiting a review of its application to convert its Bitcoin Trust into an ETF after a ruling from the federal appellate court. Grayscale's Bitcoin Trust (GBTC) is currently the largest Bitcoin ETP, holding 623,645 Bitcoins. The ruling stated that the SEC did not provide sufficient information to explain why Grayscale's application was not 'substantially similar' to other approved futures ETFs — failing to convince the judge that the spot market is less secure than the futures market for investors.

Some futures ETFs that perform well

While many anticipated that the launch of futures ETFs would increase pressure for the approval of spot ETFs, so far, there's little evidence to suggest this.

Several major Bitcoin futures ETFs have been launched since October 2021, but they have accumulated assets smaller than ETFs in Canada and Brazil. The performance of futures ETFs has also lagged behind Bitcoin's price, casting doubts on their effectiveness. The primary futures ETFs include:

ProShares Bitcoin Strategy ETF (BITO): This ETF holds 7,178 CME contracts, equivalent to over 38,000 Bitcoins. As of September 2023, the assets under management for this ETF are slightly below 1 billion USD.

ProShares Short Bitcoin ETF (BITI): This is ProShares' second ETF product, holding 564 CME contracts, equivalent to 2,820 Bitcoins.

VanEck Bitcoin Strategy ETF (XBTF): This ETF holds 320 CME contracts, equivalent to 1,600 Bitcoins.

How much impact will the U.S. spot Bitcoin ETF have on the market?

If a spot Bitcoin ETF eventually receives approval, it could have a significant impact on Bitcoin and the crypto market for several reasons:

Mainstream Exposure: A spot ETF would offer Bitcoin exposure to tens of millions of new investors through retirement accounts and brokerage accounts in an unprecedented manner.

Increased Legitimacy: SEC's approval would boost Bitcoin's legitimacy and reduce skepticism from institutional investors and advisors about Bitcoin being a viable investment asset class.

Positive Price Effect: Following the launch of ETFs in Canada and Brazil, there was a substantial rise in Bitcoin's price in 2021. The introduction of a spot ETF in the U.S. could similarly ignite investor interest, potentially leading to a comparable bull market.

While it's currently unclear when the SEC might approve a spot Bitcoin ETF, the launch of overseas Bitcoin ETFs and the recent applications published in the Federal Register highlight the favorable regulatory momentum concerning these products.