Introducing an ETF for Bitcoin Spot: Inventor of Volatility Swaps

Introducing an ETF for Bitcoin Spot: Inventor of Volatility Swaps

After BlackRock’s interest in an ETF for spot markets caused the price of Bitcoin to go up, the price increase is still going strong. The first exchange-traded fund (ETF) for Bitcoin leveraged futures has been created, and its success has raised hopes that a spot ETF will soon follow. 

If BlackRock does well, it could be a turning point that means big financial firms will start to invest in Bitcoin. Because of this success, it’s possible that other people will want to do the same thing.

Justin Young, co-founder and president of Volatility Shares, states that investors who want to invest in Bitcoin are looking for the most straightforward and well-regulated options. So he thinks that a spot ETF might be the best way to reach this goal.

In an interview with Decrypt, Young said that investors are very interested in the applications that ETF issuers are sending in. He compared them to the best investment opportunities.

The first bitcoin futures exchange-traded Fund Receives SEC approval.

Since June 15, when BlackRock filed for a spot ETF, the price of Bitcoin has gone up to its highest level in more than a year. After BlackRock, other big companies like Fidelity, Valkyrie, and Invesco have also applied for Bitcoin ETFs. But this excitement faces obstacles from the Securities and Exchange Commission (SEC). The SEC has turned down ETF proposals in the past because of concerns about the risks of Bitcoin spot markets.

Still, it’s important to know that the SEC is not totally against ETFs that have to do with Bitcoin. Volatility Shares became the first Bitcoin ETF focused on leveraged futures to get permission to operate on June 23, when the agency gave it regulatory approval. Young said that this change, along with the fact that several other ETFs are trading Bitcoin futures, could lead to the approval of a spot ETF in the future.

Following SEC concerns, BlackRock has resubmitted its Bitcoin ETF application.

Even though Young fails to be certain that the approval of his ETF sets the stage for a Bitcoin spot market ETF, he is hopeful that it has raised expectations that such a product could be approved soon.

Young said, “It makes people wonder why the SEC would give the go-ahead for a leveraged Bitcoin product but hesitate to give the go-ahead for a spot Bitcoin product.”

ETFs are a way for investors to receive exposure to stocks and commodities without actually owning them. There have been two main types of Bitcoin ETFs: Bitcoin futures and Bitcoin spot.

Since the Winklevoss twins first filed for a Bitcoin ETF in 2013, the SEC has always turned down requests for spot market trades. In its rejections, the SEC said that the applicants didn’t show enough protection for investors against fraud and market manipulation risks.

Whether or not Early Believers in cryptocurrency like it, Wall Street is coming for crypto.

Young says that the SEC’s concerns are valid, but he thinks that a spot ETF would be an effective way to deal with them.

First, he claims that an exchange-traded fund (ETF) that trades on the spot market and has regulatory approval would be a safer way to invest. The SEC is worried about how legal some crypto exchanges are and how dangerous it could be for them to operate without being registered. By making Bitcoin available as an ETF, many of these worries can be eased.

And secondly, Young stated that an ETF could help make Bitcoin markets more stable. The fact that Bitcoin and other cryptocurrencies’ legal status is unclear makes their prices fluctuate, which the SEC says is a problem for people who want to invest in them. Young says that approving a regulated spot ETF for Bitcoin could help reduce this volatility and bring in more investors who want financial products that are clear and stable.



About Ylleza Jashari

Senior student pursuing a degree in Security Studies at Rochester Institute of Technology. In my role as a Content Writer at Walletor, my primary objective is to develop informative content that effectively educates all Walletor users on the most up-to-date insights pertaining to financial transactions, digital wallets, and the broader cryptocurrency industry.