On Tuesday, the ProShares Bitcoin Strategy ETF will become the first exchange-traded fund backed by Bitcoin futures to begin trading in the U.S.

Anticipation of the offering pushed the price of Bitcoin near record territory. And institutional investors, seeing the potential for higher demand of BTC, have flocked back to the asset.

So, what’s next? 

While many investors have hoped that a “pure” Bitcoin ETF—not one based on BTC futures—would be in the cards this year, for the immediate future, it looks like more Bitcoin futures ETFs could launch to provide competition to ProShares.

The U.S. Securities and Exchange Commission is sitting on a backlog of applications, none of which need to be approved. If the agency doesn’t object, they can quietly go into existence. (Though they could also go into effect sooner if the SEC formally approved them.)

The first up is the Invesco Bitcoin Strategy ETF, which can start trading as soon as Wednesday, October 20. Next week, two more are up: the VanEck Bitcoin Strategy ETF on October 25 and the Valkyrie Bitcoin Strategy ETF. The Galaxy Bitcoin Strategy ETF and AdvisorShares Managed Bitcoin ETF could be available in early November. Thus, in the span of two weeks, the U.S. could go from zero Bitcoin futures ETFs to six. 

The other thing to watch is will Invesco file their post-effective prospectus today as their 75 days are up. They could theoretically launch on Wed. But I’ve got no word on this. Here’s look at everyone’s potential inception date if no delay from SEC at all: pic.twitter.com/HVYHeJ053c

— Eric Balchunas (@EricBalchunas) October 18, 2021

Why the litany of Bitcoin futures ETF applications? Back on August 3, while speaking at the Aspen Security Forum, SEC Chair Gary Gensler spelled out exactly what investment firms needed to do to get Bitcoin ETFs—long disallowed by the agency—through the regulator: instead of tying them to spot markets, which deal with the current price of an asset, tie them to derivatives, which are more complex, instead.

“I anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act),” he said. “When combined with the other federal securities laws, the ’40 Act provides significant investor protections. Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”

Given Gensler’s unambiguous comments, it didn’t take long for firms, tired of licking stamps on Bitcoin ETF applications only to be stonewalled by the SEC, to change their strategy. Within days, ProShares and Invesco filed for Bitcoin futures ETFs in line with Gensler’s suggestion, followed closely by VanEck, Valkyrie, Galaxy Digital, and AdvisorShares.

The differences between a Bitcoin ETF and Bitcoin futures ETF are more than academic. The futures market is firmly regulated by the Commodity Futures Trading Commission, not the SEC. Gensler and the SEC have warned that spot markets, meanwhile, are more prone to manipulation.

Morevoer, while both trade like stocks and track the price of a bundle of assets, a traditional ETF would be closely tied to the price of Bitcoin. Everyday investors, including those saving for retirement, could get exposure to BTC in their portfolios, just like they might get some Apple or Tesla stock. 

A Bitcoin futures ETF, on the other hand, is tied to Bitcoin futures contracts—speculative bets on the future price of the cryptocurrency that allow people to lock in a price beforehand. Whereas a pure ETF would give exposure to the price of BTC now, the current slate of futures ETFs exposes investors to market sentiment.

At the moment, bullish sentiment is high. A traditional ETF would likely send it higher. Unfortunately for investors, that’s not on the calendar.