Invesco Drops Efforts to Launch Bitcoin Futures ETF

A competing product by ProShares will start trading on Tuesday.

Oct 18, 2021 at 10:08 p.m. UTC
Updated Oct 19, 2021 at 3:05 p.m. UTC

Would-be bitcoin exchange-traded fund (ETF) issuer Invesco is pulling out of the race to issue a bitcoin futures product.

The company said Monday it would no longer attempt to launch an ETF linked to bitcoin futures in the U.S., a day before a competing product by fellow issuer ProShares begins trading.

The company could not immediately be reached for comment. However, a spokesperson told Bloomberg in a statement that it would continue efforts to launch an ETF in the U.S. that tracks the price of bitcoin directly.

“We have determined not to pursue the launch of a bitcoin futures ETF in the immediate near term. However, we will continue to work in partnership with Galaxy Digital to offer investors [a] full shelf of products with exposure to this transformative asset class, including pursuing a physically backed, digital asset ETF,” the statement said.

A bitcoin futures ETF, such as the one that will begin trading on Tuesday, tracks the price of CME’s bitcoin futures rather than the price of bitcoin directly. A physical bitcoin ETF would track the underlying cryptocurrency’s price.

While there may not be a huge difference in returns in the short term, the returns might diverge by a few percentage points over the course of a year. Still bitcoin futures ETFs are likely the only crypto ETF products to launch in the U.S. at the moment. Securities and Exchange Commission Chair Gary Gensler has expressed a preference for futures ETFs due to the investor protections outlined by the law that governs these ETFs.

Invesco has yet to file a notice with the SEC formally withdrawing the ETF filing. A filing Monday announced that it was delaying the effective date of its Bitcoin Strategy ETF, the name of its futures fund, to the end of October. These filings are typically filed by issuers if they have yet to secure all of the necessary permissions to launch an ETF.

Daniel Nelson contributed reporting.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Trending