According to cryptocurrency analytics and analysis company CoinGecko, there are currently $4.16 billion in investments in exchange-traded funds (ETFs) linked to the spot price of bitcoin.
Two billion, or over half of that amount, is allocated to the seven spot bitcoin exchange-traded funds (ETFs) introduced in Canada in 2021. The Purpose Bitcoin ETF, with $819.1 million in assets, is the biggest ETF among the 20 and is based in Canada.
Only ETFs linked to futures contracts, like ProShares Bitcoin Strategy, which has assets of around $1.2 billion, have received approval from U.S. authorities thus far. The Securities and Exchange Commission (SEC) is currently reviewing up to ten applications to introduce comparable spot-based exchange-traded funds (ETFs) in the United States.
Supporters argue that tracking the performance of bitcoin in an exchange-traded product with futures-based ETFs is more expensive and inaccurate. The SEC has thus far rejected every application for a spot bitcoin ETF, citing a lack of evidence from the applicants that they can protect investors from market manipulation.
According to CoinGecko, some regulatory bodies have been more accommodating. In June 2020, Germany’s ETC Group Physical Bitcoin (BTCE.DE) was the first to go. With $802 million in assets, the ETF is the second largest to be introduced.
The other seven ETFs in Europe are in tax havens, including Liechtenstein, Jersey, and the Cayman Islands. Significantly smaller items are traded in Australia and Brazil as well.
“It remains to be seen if the potential U.S. spot Bitcoin ETFs will be able to capture stronger investor interest and overtake” the ETFs from Canada and Germany. Says Coin Gecko.
The potential size of the U.S. spot bitcoin ETF market is a topic of intense dispute, with estimates ranging from $1 billion to more in first-day demand.