On this week’s episode of ETF Prime, host Nate Geraci is joined by ETF Trends’ CEO, Tom Lydon, and Bitwise’s CIO, Matt Hougan, to cover the impact that bitcoin futures ETFs have had thus far, as well as the significance of these products for investors. Additionally, ProcureAM’s CEO, Andrew Chanin, puts the spotlight on the Procure Space ETF (UFO ) and the LGBTQ + ESG100 ETF (LGBT ).
First up, Lydon compares the launch of the first bitcoin futures ETFs to the first physical gold ETF, the SPDR Gold Trust (GLD ). Getting that to that first billion dollars in assets under management occurred in just a few days. Just last summer, GLD had gotten up to $184 billion, something that was never imagined to happen, he says. Yet BITO blew past the billion-dollar AUM mark in just two days.
Lydon adds, "When you line up what’s going on right now [regarding BITO], not that it’s going to make $184 billion necessarily, but there’s a huge amount of upside."
While BITO’s quick rise to $1 billion in AUM wasn’t necessarily expected, it was a hope that was realistic, says Lydon. Through this futures-based offering that’s SEC-approved and validated, advisors now have something they can bring up to clients who are more interested in cryptocurrency than ever before.
Lydon and Geraci also go through five key takeaways for advisors. These include satisfying client demand, the validation from the SEC, how an ETF offers highly correlated on-platform exposure, and more.
What to Procure Today
Moving in another direction, Andrew Chanin discusses two of ProcureAM’s ETFs: the wonderfully named UFO and LGBT. Chanin explains that the funds were in development for a long time before their launch, and he just needed the right team to help support them.
For UFO, partnering with the S-Network Space Index was a great way to help cover the space economy, which was a big unknown up to that point. The side benefit of being first to market was aided by the comfort afforded by having such a great index to work with, says Chanin.
“We wanted to make sure that if we were going to be in the marketplace, we wanted to have an index that we could stand behind, and that’s something that we’re really proud of with UFO.”
For LGBT, the idea was to create a platform to help third parties bring their concepts to market — in this case, LGBTQ Loyalty Holdings. The fund focuses on the 100 companies that most align themselves with the LGBTQ community.
“There’s something much bigger about the LGBTQ+ community. This community represents roughly a trillion-dollar economy in the United States alone. It represents different age groups, genders, ethnicities, backgrounds, and people all over the country and world.” Chanin adds.
He points out that the community has been known to have been one of the most loyal spenders and purchasers of goods and services they believe are aligned with them. There’s a natural alpha opportunity to find companies that are supportive of these consumers.
Geraci and Chanin go on to discuss the Procure Asset Launchpad, which helps third parties bring their ideas to market.
Be Wise With Bitwise's Pending ETFs
Later on, Geraci speaks with Hougan, who is actually waiting on two live bitcoin ETF filings with the SEC. One of the funds is a futures-based ETF, and the other is a spot product. Being an expert in ETFs and crypto, Hougan has plenty of thoughts on what has happened in the past week. He also speaks to the future regarding any eventual plans the SEC may have for a physically-backed bitcoin ETF.
With debates about whether or not this was needed, Hougan points out that, as everyone is now aware, not only has this futures-based ETF launched, it became the fast-growing ETF of all time. This tells Hougan that a large class of institutional and professional money has been sitting on the sidelines waiting to get to the crypto industry, and it needed an ETF to do it.
“This makes me very bullish about the future as we get more ETFs, as that is inevitably going to come down the ETF pipeline,” Hougan adds.
Hougan believes this was an act of regulatory courage as far as how the SEC handled these products. After sitting around with proposals for Bitcoin ETFs for nearly a decade, SEC Head Chairmen, Gary Gensler, pushed forward the Bitcoin Futures ETF. It’s not exactly what was wanted, but there’s still finally something that investors clearly have interest in.
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