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The first Bitcoin-linked exchange-traded fund will officially debut on Tuesday.
The long-awaited ETF from ProShares, which tracks the Bitcoin futures market, has confirmed that it will open trading under the ticker “BITO” on the New York Stock Exchange on Tuesday.
“I believe many investors have been waiting for Bitcoin-linked ETFs for years,” ProShares CEO Michael L. Sapil said in a statement Monday. “BITO is a bit for most investors who have an account with a brokerage firm and are accustomed to buying stocks and ETFs, but don’t want to cross the learning curve with the hassle of opening another account with a cryptocurrency provider. Unlock exposure to coins … or worry that these providers may be unregulated and exposed to security risks. “
Price Bitcoin According to Coin Metrics, it was around $ 60,000 on Monday morning after hitting a high of $ 62,000 over the weekend in anticipation of ETFs.
Bitcoin futures ETFs will also be a major regulatory feat for the young crypto industry, which has long struggled to consolidate its crypto position in the highly regulated financial world. We hope that four more ETF providers will proceed with this month’s trading. Invesco may come soon this week.
“This will probably be the biggest approval from the SEC for cryptocurrencies,” said Ian Balina, CEO of data and analytics firm TokenMetrics, which regulators have been in conflict with the cryptocurrency industry for years and “accepted. “Cryptocurrency” by individual investors who have hindered. “This will be a new capital for the universe and a lock for new people.”
This ETF harvest hasn’t reached what the crypto industry ultimately wants: a fund that invests directly in cryptocurrencies.
Since 2017, at least 10 asset managers have been seeking approval to launch a Spot Bitcoin ETF. This gives investors a way to buy Bitcoin itself, rather than the derivatives associated with Bitcoin. All of them were rejected by the Securities and Exchange Commission and led by Jay Clayton. Jay Clayton argued that the market could not show resistance to operation. In a speech in August, SEC Chair Gary Gensler said he would support investment vehicles, including futures, and the proliferation of Bitcoin futures ETF applications continued.
Investing in futures-based ETFs is not the same as investing directly in Bitcoin. A futures contract is a contract to buy or sell an asset at an agreed price on a future date. Futures-based ETFs track futures contracts settled in cash rather than the price of the asset itself.
Matt Hogan, Chief Investment Officer of Bitwise Asset Management, which has its own application, said: For Bitcoin futures ETFs lined up in the SEC.
The annual roll yield is the return that futures investors earn in addition to changes in the price of the underlying asset.
“Futures-based ETFs are even more confusing,” Houngan added. “They face challenges such as position restrictions and official dilutions and cannot get 100% exposure to the futures market.”
Four Bitcoin futures ETFs lined up for review in October from ProShares, Valkyrie, Invesco and Van Eck. If the SEC does not intervene within that period, they will be allowed to move forward and list 75 days after the documents have been submitted.
Many hope that these ETF allowances will pave the way for Spot Bitcoin ETFs in the not too distant future. Not only does Gensler prefer futures-based ones, but the market has grown much in a short period of time since the first wave of ETF applications. The SEC has been challenging the crypto industry for many years to prove that there are large regulated market transactions alongside the spot Bitcoin market. That’s possible, according to a Bitwise survey submitted to the SEC last week.
“The Bitcoin market is mature and the CME Bitcoin futures market is actually a major source of price discovery throughout the Bitcoin world,” said Hougan. “Prices will move to the CME market before moving to Coinbase, Kraken, and FTX, thus meeting the SEC’s hurdles for potential approval of spot-based ETFs.”
He added that the data suggests that more capital is being invested in the CME Bitcoin futures market.
“The cryptocurrency market was initially dominated by retail exchanges like Coinbase, then dominated by things like BitMEX and Binance. No one broke records or did homework. Homework shows that the market has changed, “says Hougan.
The first Bitcoin futures ETF to debut on the New York Stock Exchange on Tuesday, according to ProShares
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