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The Bitcoin futures ETF is here

The Bitcoin futures ETF is here

Bitcoin's latest all-time high has been correlated to the approval of a Bitcoin Futures ETF from the Securities Exchange Commission in the United States, and rightfully so. Bitcoin's on-chain metrics (data extracted from the actual blockchain that helps analysts infer the sentiment and behavior of investors) have been showing symptoms of good health for long. But the ETF has been the first relevant psychological boost in a while, after months of China scaring investors off.

An exchange traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can. Investopedia

An EFT is like putting assets inside of a box and then trading the box in a regular stock market. ETFs usually offer a more convenient user experience to investors who want exposure to the asset but can't handle the hassle of dealing with wallets, custody, etc. ETFs take crypto to their turf, and this means opening the gates for new money.

A Bitcoin ETF has been on the table for ages (8 years since the first proposal), and it will still be for a while because what the SEC has approved recently was the first Bitcoin Futures ETF. What investors can see inside the box is not the actual asset but futures contracts. Gary Gensler, SEC chair, already expressed his preference towards futures ETF because the regulatory and supervisory framework is more restrictive, and investors are supposed to be better protected than in the case of a spot ETF.

The downside is that futures ETFs, especially in the case of Bitcoin, are slightly less profitable by design. A spot-based ETF would open the floodgates of traditional retail investors.

But the moral upside is what will remain. ETFs are a bold step from crypto into traditional finance. One more reason to believe this is only going up in the long run.