The pressure to approve crypto ETFs results from the need to establish a decentralized finance (DeFi) system with simplified transaction options. The Securities and Exchange Commission’s (SEC) conflicting attitudes toward approving crypto futures and spot exchange Traded Funds (ETFs) are glaring. The difference in attitude is visible after the SEC approves Bitcoin futures ETF while ignoring spot ETFs. However, the basis for disregarding spot ETF vs futures ETF approval presents several talking points. Let us take a look at a few issues: How do Crypto Futures and Spot ETFs Differ? The futures ETFs involve investors betting on the crypto futures where the price movements of the underlying assets determine the trade outcomes. The trade relies on futures contracts which stipulate the period when the investors must sell or acquire particular crypto asset classes. The crypto futures investment involves buying futures contracts and selling when the terms prove true at a later date for profit or selling at a loss. What is Spot ETF? The spot ETFs involve investing in derivatives that depend on the actual market values of the underlying crypto assets. The profitability of the spot ETFs will shift along the path taken by the crypto market, with the outcomes relying on all conditions that influence the market. The investors get exposure to crypto classes without holding them in individual wallets but can buy and sell their derivatives. Wh...
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