Spot vs. future – investing in Bitcoin and Ethereum

The spot market is the simplest way to invest. An asset is bought or sold at the current market price, and ownership transfers to the buyer immediately.

The price is driven by supply and demand. More buyers push the price up, more sellers push it down. The spot price therefore always reflects what the market is willing to pay right now.

There is no maturity date and no hidden calculations. The investor is directly exposed to the price movement: if Bitcoin or Ethereum rises, the investment gains in value; if they fall, the value drops accordingly.

This direct link is what makes the spot price particularly transparent and easy to follow.

A future works differently. Rather than trading the asset itself, investors trade a standardised contract. The contract represents an obligation to buy or sell an underlying asset, such as Bitcoin or Ethereum, at a fixed price on a given date in the future.

It is a binding agreement between two parties. The investor does not gain direct ownership but instead takes a position on the asset's future price.

Futures are traded on dedicated exchanges with a set maturity and standardised contract size.

At maturity, the contract is settled. In theory, the asset should be physically delivered, but in practice actual delivery rarely takes place. Instead, the difference between the agreed price and the current market price is settled in cash.

The futures price starts from the spot price and is then adjusted for the conditions that apply over the life of the contract. The premise is straightforward: what does it cost to buy the asset today and hold it until the contract expires?

Since capital is tied up during that period, financing costs are added. The prevailing interest rate environment plays a key role here. In practice, the spot price is compounded with interest over the contract's life, and the higher the rates, the larger the premium.

At the same time, any ongoing returns can affect the price. If the asset generates income during the contract period, for example in the form of dividends, this is deducted from the futures price. The buyer of a future has no entitlement to such income.

For certain assets, additional costs apply. Commodities such as oil and metals, for instance, require physical storage to ensure delivery at expiry.

Over time, the futures price gradually converges with the spot price. At maturity, the two prices are identical. If they were not, market participants could earn risk-free profits, something the market quickly corrects.

In the crypto market, these differences become particularly apparent. Bitcoin and Ethereum trade around the clock on a large number of exchanges worldwide. The spot price is based directly on actual purchases and sales, showing where the market stands at any given moment.

Futures are anchored to the spot price but are also influenced by time, financing costs and market expectations. Because cryptocurrencies are highly volatile, futures prices can at times diverge significantly from the current market price.

Spot-based products, by contrast, track the market directly, making their performance easier to understand and follow.

Spot and futures represent two different ways to participate in the price performance of Bitcoin and Ethereum.

On the spot market, investors gain direct exposure to the asset and follow the price movement on a one-to-one basis.

With futures, investors instead trade a contract whose price is also shaped by time, costs and expectations.

With its new spot-based products on Bitcoin and Ethereum, Vontobel broadens its offering and gives investors the choice between direct market exposure and a more structured solution, depending on strategy and needs.