Here’s Why Invesco Pulled Out of Bitcoin (BTC) Futures ETF Last Minute

Prashant Jha
November 22, 2021
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Invesco, a $1.6 trillion asset manager surprised many by pulling out of its Bitcoin Futures ETF bid at the last moment. What turned even more heads was the fact that the withdrawal came after the SEC has already approved ProShares’s Bitcoin Futures ETF that created and broke several records on debut. Now the asset manager has come out to reveal the reason behind the unexpected pullback.

Anna Paglia, global head of ETFs and indexed strategies at Invesco balmed the SEC’s strategy to be the main reason behind its surprising move. Paglia said the regulatory constraints put on the fund would have made it a very expensive investment for traders. He particularly showed displeasure towards the SEC’s decision to go with a 100% Futures based product as it typically incurs a loss when it rolls a front-month contract into a longer-dated one.

“We thought that CME futures were going to be a very effective element of the portfolio. We never thought they would be effective when they would be 100 per cent of the product,” said Anna Paglia, global head of ETFs and indexed strategies at Invesco.

SEC chief Gary Gensler made it clear that a spot market-based Bitcoin ETF would not get SEC approval as the regulatory body still believe the market is not mature enough and might fall prey to scams and manipulations. This is the reason a majority of firms either withdrew their spot ETF applications or filed an additional one for the Futures ETF.

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Will Invesco Launch a Spot Bitcoin ETF?

Invesco says an ideal portfolio for a Bitcoin investment would be a mix of futures, swaps, physical bitcoin, ETFs, and private funds. Paglia also revealed that Invesco was among the first to file for the Bitcoin Futures ETF but later decided against it as internal surveys and research showed that it would not be as beneficial as they thought it would be. He explained,

“Our view was that a futures-based ETF was going to be imperfect,” Hougan said. “When we filed we thought that it would be worth it, but costs built on costs — the contango, the commission merchants, added costs to work through a Cayman subsidiary — so that we ultimately decided it wasn’t in the interests of long-term investors.”

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.