Spot Bitcoin ETF

A Spot Bitcoin ETF (Exchange-Traded Fund) is an investment fund that tracks the price of Bitcoin and holds actual Bitcoin as its underlying Asset. Unlike futures-based ETFs, which invest in Bitcoin futures contracts, a Spot Bitcoin ETF directly owns Bitcoin, allowing investors to gain exposure to the Cryptocurrency’s price movements without having to buy and store Bitcoin themselves.

For example, if an investor purchases Shares in a Spot Bitcoin ETF, the fund uses the Capital to buy Bitcoin on the open market. The value of the ETF Shares is then linked to the current market price of Bitcoin.

As of 2023, several proposals for Spot Bitcoin ETFs have been submitted to regulatory bodies, with notable cases including:

• Grayscale Bitcoin Trust (GBTC) seeking conversion to a Spot Bitcoin ETF.
• BlackRock’s application for a Spot Bitcoin ETF, which has garnered significant attention in the financial markets.
• Invesco’s collaboration with Galaxy Digital to propose a Spot Bitcoin ETF.