Regulated Bitcoin Products Leave Hidden Fees in Their Wake

A recent study by Purdue University professor Mindy Mallory found that investors can hold economically similar exposure to Bitcoin through different regulated products, but pay materially different amounts to keep those positions open.

The study compared two routes to similar Bitcoin exposure: spot exchange-traded products and listed options on those products versus standard and micro CME futures. The results showed that the annualized carry embedded in CME Bitcoin futures exceeded the fee-adjusted carry reconstructed from IBIT options by an average of 2.581 percentage points, with a median difference of 2.521 points.

The study's findings are significant because they expose one of the less visible consequences of Bitcoin's arrival on Wall Street: investors gained several regulated ways to reach the same asset, but those products were placed into separate securities, options, and futures systems that still don't behave like one integrated market. As a result, economically related Bitcoin exposures can remain priced differently when capital, margin, and liquidity cannot move frictionlessly between their respective systems.