Bitcoin Futures ETF

[DaC0nsumeR]

Can anybody with more experience in tradfi explain this:

I am reading that the approval of a Bitcoins Futures ETF - contrary to moonboi hype - could actually slow or reverse any potential upward trajectory that BTC would otherwise have.

Apparently if it trades with a contango then it will be hit by "roll yields". Not sure I understand this, but am interested still.

Or, just generally, how would approval of a Bitcoin ETF affect the crypto market short term?

[mexite]

I believe the approval of a Bitcoin ETF would first have a positive impact on the price as it signals an acceptance and increased adoption of BTC by mainstream. But since it will be partly regulated in that way, it may keep price manipulations in check and we may not see all these meteoric rise and fall of BTC price like before again.

[mk4]

Having bitcoin futures more accessible to the institutional markets can boost bitcoin's volatility by a good chunk. And, as you know, volatility isn't always for positive upwards price action— it can most definitely also be for the downside.

For the contango thingy, take note than with futures, investors will take long/short positions, which can apply "unnecessary" buy/sell pressure onto the markets, which can sort of domino effect on either direction.

To answer your last question: A Bitcoin futures ETF is positive in the short to near-mid term, probably not so good in the long term without an actual ETF. But fortunately, as far as I know, having a Bitcoin futures ETF approved makes the chances of an actual Bitcoin ETF being approved a lot higher. Whereas having an actual Bitcoin non-futures ETF will negate a good chunk of the "unnecessary" volatility that a futures ETF will bring. So in the long term, having a futures and non-futures ETF is a huge positive.

Source: not a tradfi expert, but this is how I understood it personally

[davis196]

Bitcoin futures are just financial derivatives.The traders,who are trading Bitcoin futures aren't necessarily trading actual Bitcoins.They are just betting on a possible Bitcoin price in the future.
Financial assets,that have a volatile price,like Bitcoin,are suitable for such financial derivatives-futures and options.That doesn't mean that BTC futures will have big influence over the actual Bitcoin price.
With that being said,I couldn't care less about this Bitcoin Futures ETF.
It has been stated many times that Bitcoin ETFs being approved by the SEC will have a positive impact over the Bitcoin price,but we are just fine without having multiple Bitcoin ETFs being approved.

[Husires]

I wrote this article a few weeks ago ---> Are Bitcoin ETFs really important? and quote it as follows:

• who will guarantee your money if the price drops by 90% or more?
  
• Investors will resort to mutual funds and exchange-traded funds, which usually own a variety of stocks, investments and other assets and avoid these high risks.
• Bitcoin ETF is not available to US investors and the SEC's slowness in approving one may make investors apprehensive.
• Investing in Bitcoin ETFs combines two ideal parts of investing: ease of investing in an ETF, low exposure to risk (holding bitcoin, learning more about crypto, subscribing to unregulated platforms, not being able to buy large amounts or monetize them in a timely manner) and exposure to Bitcoin.

Source:

https://bitcointalk.org/index.php?topic=5361782.msg58014683#msg58014683
https://academy.binance.com/en/articles/bitcoin-etfs-explained

[slaman29]

First time to hear about roll yields, but I suppose that is a longterm risk. The ETF approval should be immediate cause for positivity, because it means recognition and it means legality for a new asset.

But if ETFs also brings risk (as a form of gambling) and allows side manipulation of markets, then that risk could affect Bitcoin's reputation as a market resistant to manipulation (even though ETFs are not directly affecting actual BTC trading).

[bitgolden]

Basically it means that huge companies will be able to buy Bitcoin ETF instead of bitcoin itself. This way there will be some companies who will end up buying bitcoin, and they will take the real risk by holding that bitcoin, whereas other companies will just invest into that companies ETF and they have very minimal risk. Obviously the risk still lies with the fact that you could end up with a loss on that ETF but that is true in everything you invest, not doing the work and only getting the profit is the part they will love.

This is how ETF could change the world, I do not think that it will be too much, but many super rich companies could buy bitcoin ETF and that would mean tens of billions of dollars worth bitcoin bought and moved out of the market making the price go up. I believe it will not be that much money, but many believe it will be huge.