Bankless What the ETH Futures Approvals Mean for Crypto with Eric Balchunas
Oct 10, 2023
Eric Balchunas, an ETF analyst at Bloomberg Intelligence, joins to unpack the historic launch of multiple Ethereum Futures ETFs in the U.S. He discusses their potential impact on the crypto market, including trading volume concerns and the implications for Bitcoin ETFs. Balchunas also highlights the role of these products in bridging crypto with traditional finance, the evolving landscape of investment strategies among younger investors, and the challenges posed by regulatory scrutiny for Ether spot ETFs.
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Unprecedented ETF Launches
- The SEC approved multiple ETH futures ETFs simultaneously, breaking with tradition.
- This aimed to avoid a repeat of the ProShares Bitcoin futures ETF's dominance after its three-day head start.
Competition Among ETFs
- Launching many ETFs at once increases competition, emphasizing marketing and fees.
- Issuers like Bitwise and ProShares highlight their strengths to attract investors.
Futures vs. Spot ETFs
- Futures ETFs are inferior to spot ETFs due to "roll costs" when switching contracts.
- These costs erode returns, making spot ETFs preferable for long-term investors.