For most everyday investors, crypto assets have evolved from something you had to buy on exchanges to something you can now access through ETFs. Especially since the approval of the first Bitcoin spot ETFs in the U.S. in early 2024, investors can finally track Bitcoin’s market price directly from a brokerage account. But this raises a new question:
There have long been Bitcoin futures ETFs, some of which have been around for over three years—like ProShares’ BITO. So, which is actually better for long-term holding? Let’s break it down across several dimensions.
1. Tracking Accuracy: Spot ETFs Hug the Price, Futures ETFs Often Lag
One of the biggest differences lies in how prices are tracked.
- Bitcoin spot ETFs (e.g., BlackRock’s IBIT, Fidelity’s FBTC) directly hold physical Bitcoin, and their NAV performance closely matches the actual market price.
- Bitcoin futures ETFs (e.g., ProShares’ BITO, VanEck’s XBTF) hold CME-listed futures contracts and must roll them over monthly, which creates “roll costs” and “price deviation.”
📉 Example: In 2023, BITO’s NAV rose about +156%, while BTC’s market price increased by +172%. The gap was mainly due to rolling losses in the futures structure.
If your goal is long-term holding and mirroring Bitcoin’s price trend, spot ETFs are clearly the better fit.
2. Product Structure and Cost: Futures ETFs Cost More and Leak More
| Type | Examples | Mgmt Fee | Hidden Costs | Structure |
|---|---|---|---|---|
| BTC spot ETF | IBIT, FBTC | 0.20%–0.25% | Virtually none | Holds physical BTC |
| BTC futures ETF | BITO, XBTF | 0.85%–0.95% | Rolling cost, contango | Holds CME futures contracts |
- Futures ETFs charge about 4x higher fees than spot ETFs;
- They also incur additional cost from rolling contracts and managing exposure;
- Spot ETFs simply hold Bitcoin, avoiding these structural frictions.
So in terms of cost and structure, spot ETFs are the clear winner.
3. Performance and Capital Flow: Institutions Prefer Spot ETFs
As of May 2025:
- BlackRock’s IBIT manages over $18 billion in assets, making it the top crypto ETF in the U.S.;
- Fidelity’s FBTC has attracted over $12 billion;
- In contrast, legacy futures ETF BITO holds around $1.5–2 billion, with stagnating growth.
Bloomberg data also shows:
- In the first three months post-launch, spot ETFs saw over $9 billion in net inflows;
- Meanwhile, futures ETFs recorded near-zero inflows during the same period.
Investors have voted with their money: due to its transparency and accuracy, the spot ETF is widely seen as the superior long-term vehicle.
4. Compliance Transparency and Tax Treatment: Spot Structure Wins Again
- Tax-wise: In the U.S., Bitcoin spot ETFs are treated like securities in brokerage accounts, with capital gains tax deferral and other benefits;
- Compliance-wise: Most spot ETFs use regulated custodians like Coinbase or BitGo, and avoid opaque trading venues;
- Futures ETFs are also compliant, but more complex, involving derivatives and leverage.
From a tax and regulatory perspective, spot ETFs integrate more easily into IRAs, retirement accounts, and long-term wealth plans.
5. So Do Futures ETFs Still Have a Role?
Some may ask: does that mean futures ETFs are “obsolete”? Not quite.
- In regions or countries where spot ETFs aren’t yet allowed, futures ETFs may still be the only compliant option;
- Some short-term traders may prefer futures ETFs for higher liquidity or leverage;
- Leveraged BTC ETFs (like BITX, BTFX) are built on futures contracts, and can be valuable for high-risk strategies.
In other words: use spot ETFs for long-term investing, futures ETFs for tactical trading—each has its place depending on your strategy and horizon.
Conclusion: For Long-Term Investors, Bitcoin spot ETFs Are Clearly Superior
All things considered, Bitcoin spot ETFs outperform futures ETFs in terms of tracking precision, fee structure, capital inflows, and tax friendliness. If you’re aiming for medium-to-long-term crypto allocation, spot ETFs clearly provide the better cost-performance tradeoff.
Meanwhile, futures ETFs may still make sense for traders, investors without access to spot products, or those seeking niche strategies. The key lies in matching the tool to your investment goal and timeframe.
As Ethereum, Solana, and other spot crypto ETFs gain traction in the future, we may be entering a new era of ETF-based crypto portfolio construction.
How to Build Your Crypto ETF Portfolio in 2025
FAQ – Bitcoin Spot ETF vs Futures ETF
Q1: What’s the main difference between a Bitcoin spot ETF and a futures-based one?
A: A Bitcoin spot ETF directly holds physical Bitcoin, tracking the asset’s market price 1:1. A futures ETF holds CME Bitcoin futures contracts, which can deviate from spot prices and involve rolling costs.
Q2: Which one is more suitable for long-term investment?
A: Bitcoin spot ETFs are more suitable for long-term holding due to their low cost, direct tracking, and minimal structural risks compared to futures-based ETFs.
Q3: Are Bitcoin spot ETFs safer from a regulatory and tax perspective?
A: Generally, yes. Spot ETFs are treated similarly to other securities in brokerage accounts and benefit from capital gains tax treatment in the U.S., while also using regulated custodians like Coinbase or BitGo.
Q4: Why do some investors still choose futures-based Bitcoin ETFs?
A: Futures ETFs may be preferred in jurisdictions where spot ETFs aren’t yet approved, or by traders who seek short-term exposure, higher liquidity, or leveraged strategies.
Q5: Can I include Bitcoin ETFs in my retirement account?
A: Yes. Bitcoin spot ETFs can typically be held in retirement accounts like IRAs or 401(k)s in the U.S., making them accessible for long-term tax-advantaged investment strategies.
