In the current crypto landscape, where spot Bitcoin ETFs are poised to have a significant impact, Michael Saylor, co-founder of MicroStrategy and a Bitcoin advocate, shed light on a crucial disparity that underscores the necessity for spot ETF approval.
Futures ETF Price Return vs. Bitcoin Price
Saylor highlighted the gap between the year-to-date price return of ProShares Bitcoin Strategy ETF (BITO) and the price of Bitcoin during the same period. While Bitcoin has experienced a 57% increase year-to-date, $BITO has risen by only 28%. Saylor argued that this discrepancy emphasizes the need for the approval of spot Bitcoin ETFs.
“(ProShares Bitcoin Strategy ETF) $BITO has underperformed $BTC by 28% YTD. This is why we need a Spot Bitcoin ETF.”
Bitcoin ETF Price Return vs. Total Return
However, James Seyffart, an ETF analyst at Bloomberg, clarified that Saylor was comparing the price return of BTC with the price return of $BITO, rather than considering the total return, which includes dividend value. Based on this comparison, Seyffart explained that the ProShares ETF is lagging behind by approximately 6.4% year-to-date.
Therefore, with the approval of spot Bitcoin ETFs, the crypto market could witness increased institutionalization, potentially minimizing the gap between returns in futures ETFs and spot ETFs. It remains to be seen how MicroStrategy, the largest institutional holder of Bitcoin, will adjust its buying and accumulation strategy if and when spot ETFs become a reality. Institutions like BlackRock and Fidelity would need to accumulate significant volumes of BTC to operate the ETFs, generating substantial demand for the cryptocurrency.