Bitcoin, the first price-based ETF launched on Wall Street

Bitcoin, the first price-based ETF launched on Wall Street
Bitcoin, the first price-based ETF launched on Wall Street

It is based on futures on the price trend of the cryptocurrency. Its debut could be the first in a series of bitcoin-based financial products

Bitcoin (Getty Images)

Tuesday 19 October on the New York Stock Exchange the first appeared exchange-traded fund (etf) sui bitcoin. The company launched it ProShares and it has been a great success for now, as it closed the trading day at +4,85%, the second most traded ETF ever at its debut.

AND an important novelty for the world of cryptocurrencies, after that for years the financial supervisor they had made a wall on such products. More are expected to arrive in the coming weeks, this as the value of bitcoin continues to rise and has surpassed the April record of $ 64,859.

The new ProShares ETF

ProShares has been a group that has been active since 2006 and offers around 130 exchange-traded funds (ETFs), passively managed investment funds. In August he made an official request to Sec, the the highest authority in the United States in trade regulation and corporate stocks, to list a new product on the New York Stock Exchange that follows the trend of bitcoin futures contracts, the ProShares Bitcoin Strategy Etf (Bito). Not a product that invests directly in bitcoin therefore, but exposed to its own price changes through derivatives already existing on the market. That is to say, on contracts that speculate on the future price of bitcoin, which will not necessarily correspond to its real price.

The SEC had 75 days to express any objections, which however did not arrive. If in the past four years the US authority under the leadership of Jay Clayton had rejected at least ten investment solutions of this type, with the new boss taking office in August Gary Gensler it was immediately understood that things would change, given that he himself had made openings to ETFs linked to cryptocurrency futures. This is how the official debut of the ProShares investment fund took place on Tuesday 19 October, the first of its kind eight years after the first proposal, which in one day saw its price rise. from $ 40 to $ 41.94, a + 4.85% which according to Elisabeth Kashner, director of research on ETFs at FactSet, constitutes the second best debut ever in terms of exchanges (higher than one billion dollars of value) for a product of this category.

If until now the investment in cryptocurrency fluctuations was in fact reserved for institutional investors through futures such as those of Baked, already authorized on some American stock exchanges such as that of New York and Chicago, with the first etf on bitcoin, the sector also opens up to small and medium retail savers, particularly comfortable with this type of passive instrument. This even though there were already easy-to-use tools to expose yourself to bitcoin, including apps such as Paypal.

A good time for cryptocurrencies

The launch of the ProShares Bitcoin Strategy Etf has been in the air for a while and it is no coincidence that the price of the most important cryptocurrency has continued to rise in recent weeks. Its value has increased by 48% since September and has passed i 66 thousand dollars, beating the all-time record of last April, when the digital currency reached $ 64,859.

According to several analysts, it could exceed 100 thousand dollars per bitcoin, precisely in the wake of the new openings to investment products to this of financial supervisory authorities. Already in July, after cryptocurrencies had appeared on exchanges via futures in recent years, the company ProFunds, a ProShares affiliate, launched the United States’ first bitcoin mutual fund. Earlier this month, the SEC gave its okay to an etf of the company Volt Equity which invests in tech companies with bitcoin exposure and supporting infrastructure. Now it was the turn of the first bitcoin exchange-traded fund (ETF), which could pave the way for several other products of this type in the near future.

A new passive cryptocurrency product, a futures-based ETF, is expected to debut this week Valkyrie Bitcoin, which has already obtained the certifications for the listing on the Nasdaq. At the end of the month it was to be the turn of another similar product from the American company Invesco, the Invesco Galaxy, who, however, in the past few hours has withdrawn the application, suggesting that he wants to study with his partner Galaxy Digital HoldingIt’s a product that directly holds cryptocurrencies and not futures. Other bitcoin products are waiting to receive the approval of the SEC, or rather its non-objection. Among them, the Global X Bitcoin Trust, the WisdomTree Bitcoin Trust and the Kryptoin Bitcoin Etf.

The launch of the industry’s first ETF should have broken the reticence barrier. According to Ian Balina, CEO of the analytics firm Token Metrics, “We are ahead of a dam of new capital and new people ready to enter the cryptocurrency space “. Other analysts, however, point out that the attractiveness of these ETFs will remain low at least in the world of retail savers, who will keep their distance from their complexity and from continuous fluctuations. Institutional investors will continue to occupy the sector (increasingly in terms of volumes), which is still good news for the future of cryptocurrencies.

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