Do we even need a U.S. Bitcoin ETF?

Because bitcoin is driven so much by narrative, it’s entirely possible that bulls hoping for a bitcoin ETF may find themselves caught in a sell-the-news event if the U.S. Securities and Exchange Commission approves one.

Speculation has been building that the SEC could approve a futures-backed bitcoin ETF product as soon as this week, on a wave of cryptocurrency-themed ETF approvals.

This past week, several ETFs investing in cryptocurrency companies have all gained approval from the SEC and with a deadline for a decision fast approaching, sentiment is bullish that the SEC may finally approve a bitcoin ETF, albeit not one that buys the underlying cryptocurrency, instead relying on futures instead.

But it’s not immediately clear what good a bitcoin ETF will do at this stage of the cryptocurrency industry’s development.

As it is, retail-facing platforms like Robinhood Markets (-0.025%) and eToro have provided access to cryptocurrencies like bitcoin to ordinary investors.

And institutional investors have since 2013, had access to bitcoin through vehicles such as the Grayscale Bitcoin Trust, warts and all.

Awareness and familiarity with the asset class has also grown, and family offices and other institutional investors have worked with specialist custodians and over-the-counter providers to either buy bitcoin to store and hold, or trade it.

Bitcoin is already entering overbought territory on its 14-day relative strength index (RSI), a common tool used by traders to determine if an asset has been overbought.

Some technical traders however say that an RSI of 70 is too low for cryptocurrencies like bitcoin, especially given how volatile they are, preferring instead to use a higher threshold of 80 instead to mark “irrational exuberance.”

The past year has also seen many rallies followed by sharp corrections on typical buy the rumor, sell the news type trades, from El Salvador’s botched roll out of bitcoin as legal tender, to Coinbase Global’s (-1.02%) lackluster direct listing on Nasdaq.

It’s also entirely possible that a U.S. bitcoin ETF, while positive, will do very little to advance the industry as a while.

To be sure, U.S. investors who want to gain exposure to bitcoin have a variety of options.

And while an ETF would make it easier, as more U.S.-based trading platforms could conceivably offer access to the cryptocurrency, as opposed to the handful that currently do, it would hardly be a game changer.

The SEC appears to be leaning towards a futures-backed bitcoin ETF, which is not ideal given that the ETF has to roll forward the futures contracts, which results in slippage that tends to eat into performance.

Investors may be better off just buying the real thing.