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The numbers are in, and the Bitcoin Futures ETF had the biggest debut of the year. By far. We have to âexclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA,â but thatâs fair. Apparently, the ProShares Bitcoin Strategy ETF got to the top naturally, via real trades by real people and institutions. Considering that just its approval by the SEC seemed to catapult Bitcoinâs price to the edge of an All-Time High, a question arises. How will the market react tomorrow? And the day after that?
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But letâs avoid speculation and check Senior ETF Analyst for Bloomberg, Eric Balchunasâ charts:
If we don't exclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA (not natural), it still ranks #2 overall. Here's that list. The reason some of these shouldn't be included IMO is they don't really represent grassroots interest. pic.twitter.com/wmZiHnpFrS
â Eric Balchunas (@EricBalchunas) October 19, 2021
Considering the first-ever Bitcoin Futures ETF âalso traded more than 99.5% of all ETFs,â itâs fair to say the launch was a huge success. What does it mean for the following ETFs? According to Balchunas, itâll be hard for them to succeed. âEvery day counts because once an ETF gets knows as âthe oneâ and has tons of liquidity, itâs virtually imposs to steal.â And, what does this mean for the market in general? NewsBTC already covered this question:
âAlthough these ETFs have attracted criticism for being backed by futures contracts and not the underlying asset, they could still have big implications for Bitcoin â allowing tax-sheltered and retirement accounts to easily get exposure, and potentially opening the cryptoasset to a much broader audience.â
The NYSE welcomes @ProSharesETF in celebration of the first U.S. Bitcoin-Linked ETF $BITO https://t.co/0qh0NDS2d4
â NYSE đ (@NYSE) October 19, 2021
Why Is There A Bitcoin Futures ETF Instead Of A Bitcoin ETF?
Who better to answer this question than the SECâs chairman himself, Gary Gensler told CNBC:Â
âWhat you have here is a product thatâs been overseen for four years by the U.S. federal regulator CFTC, and thatâs being wrapped inside of something within our jurisdiction called the Investment Company Act of 1940, so we have some ability to bring it inside of investor protection.âÂ
So, the Bitcoin Futures ETF falls under the Commodity Futures Trading Commission jurisdiction. Plus, it tracks the Chicago Mercantile Exchange (CME) Bitcoin futures. And the SEC considers that the institutional support will protect the customer. According to them, the underlying asset, Bitcoin, is too volatile and subject to manipulation.
The first persons to propose a Bitcoin ETF in the USA, the Winklevoss twins, lament that when they did the price of Bitcoin was $68 and nowadays is $64K. âThatâs almost a 1000x return in the meantime. Iâm glad we got here, but it has taken too long.â
When @cameron and I first proposed a bitcoin ETF in July 2013, the price of bitcoin was $68.
Today, upon the launch of two bitcoin futures ETFs, the price of bitcoin is $64,000.
That's almost a 1000x return in the meantime. I'm glad we got here, but it has taken too long.
â Tyler Winklevoss (@tyler) October 19, 2021
Also a skeptic of the Bitcoin Futures ETFâs long term potential, Anthony Bertolino, VP of growth at iTrustCapital, told CNBC:
âThe launch of the first bitcoin-linked ETF in the U.S. will bolster the broader crypto market and help an entirely new investor class experience the benefits of bitcoin as a legitimate asset. However, a derivatives-based bitcoin ETF is not where we want to be long-term.â
BTC price chart for 10/20/2021 on Forexcom | Source: BTC/USD on TradingView.com
What Are The ProShares Bitcoin Strategy ETFâs Characteristics?
The next few days will be crucial for this story. Thereâs a possibility that todayâs demand was orchestrated, at least in part. If this happened, itâll be very obvious in the following days. In any case, the fundâs official site defines the first Bitcoin Futures ETF as:
âProShares Bitcoin Strategy ETF (BITO) is the first U.S. bitcoin-linked ETF offering investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way. The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts.â
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And alerts the clients that âThe fund does not invest directly in bitcoin,â and that âThe price and performance of bitcoin futures should be expected to differ from the current âspotâ price of bitcoin.â Forewarned is forearmed.
Featured Image: Screenshot of the ETF's opening bell ceremony| Charts by TradingView
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