Monday, January 24

Bitcoin Futures ETF Opens With Profit And Explosive Trading Volume

After years of setbacks and setbacks, the first ever Bitcoin-linked exchange-traded fund in the US, the ProShares Bitcoin Strategy ETF, made its debut on Tuesday, marking a watershed moment for the crypto industry.

The fund, which trades under the ticker BITO, rose as much as 5.4% to $ 42.15 before reducing earnings. Both the crypto community and investors on Wall Street have long waited for it, many of whom have argued for years that a Bitcoin-focused exchange-traded fund was overdue. The ProShares fund is based on futures contracts and was filed under mutual fund rules that SEC Chairman Gary Gensler has said provide “significant protections for investors.”

With only 20 minutes to go before its commercial premiere, approximately 6.4 million BITO shares worth approximately $ 264 million changed hands, according to data compiled by Bloomberg.

Meanwhile, Bitcoin gained as much as 3.1% to trade around $ 63,274, slightly below its April all-time highs of just under $ 65,000.

“It’s an incredibly bullish week – there’s been really positive sentiment around the ETF in particular,” Sam Bankman-Fried, chief executive of the FTX exchange, said by phone.

It has long been assumed that whoever gets approved first could reap the greatest benefits, including industry recognition and the ability to attract huge amounts of cash. Some analysts are already bullish on the prospects for BITO: The futures-based Bitcoin ETF could attract more than $ 50 billion in inflows in its first year given the hype surrounding it, according to prominent Bitcoin bull Tom Lee, co-founder of Fundstrat Global Advisors.

There are other applications for futures-based Bitcoin ETFs on the queue. Analysts anticipate launches from issuers such as Valkyrie, whose exchange-traded fund Bitcoin Strategy, which will debut on Wednesday, will now trade under the ticker BTFD.

Meanwhile, Grayscale Investments LLC and the New York Stock Exchange filed an application to convert the world’s largest Bitcoin fund, the GBTC ticker, into an ETF, appealing to regulators for approval just as their wildly popular vehicle is riddled with competition.

Market watchers have some yardsticks by which to measure initial reception of BITO. The SPDR Gold Shares fund, ticker GLD, had the fastest rise to $ 1 billion in assets under management, reaching the milestone in just three days, according to Bloomberg Intelligence. Most recently, the VanEck Social Sentiment fund, ticker BUZZ, saw more than $ 400 million in shares traded on its debut earlier this year, one of the highest amounts for an ETF on its first day.

Bloomberg News reported last week that the US Securities and Exchange Commission would not get in the way of launching a futures-backed Bitcoin fund.

Gensler has been considered to be more open-minded towards cryptocurrencies than his predecessor, Jay Clayton. Observers cite Gensler’s previous interest in the world of cryptocurrencies: He once taught a class at MIT’s Sloan School of Management called “Blockchain and Money.” And the president had pointed out over the summer that regulators could be more open to a Bitcoin ETF if it were based on futures rather than the cryptocurrency itself.

© 2021 Bloomberg

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