Many years of anticipation, many postponements and finally there it is! Bitcoin ETF has made its debut on the US trading floor.
The big day
October 19, 2021 will go down in the pages of crypto history as truly groundbreaking. After many years of anticipation, a Bitcoin-based ETF has entered the US market. Its provider is the ProShares Bitcoin ETF Strategy. The fund began trading on the New Your Stock Exchange, under the ticker BITO.
BITO is based on futures contracts on the Bitcoin exchange rate. This means that its participants do not purchase physical Bitcoin, which has no direct impact on the cryptocurrency’s price. Nevertheless, this opens up wider days for investors who gain easier access to Bitcoin. This is especially true for institutional investors, who have often been prevented by regulations from operating in the cryptocurrency space.
ProShares CEO Michael L. Sapir commented on the debut as follows: “We remember 1993 as the year of the first equity ETF, 2002 the first bond ETF, 2004 the first gold ETF. We will remember 2021 as the year of the launch of the first cryptocurrency-linked ETF.”
Bitcoin with a record
It is highly likely that the ETF launch had a significant impact on Bitcoin reaching a new ATH. After all, its debut is a clear signal that the U.S. is accepting the presence of cryptocurrencies in the market space and letting the world know that they should be reckoned with.
Nevertheless, two very interesting things have happened around the fund itself. The first is the trading volume that was achieved on the opening day. And this exceeded the psychological barrier of 1 billion dollars. However, on the second day of trading, the all-time record was broken regarding the value of sold contracts. Thus, the total amount of BITO-based assets held by investors also broke the 1 billion barrier. The previous record in the ETF segment belonged to gold, which took 3 days to reach this value in 2004.
Bloomberg’s analyst Eric Balchunas, commented on the event as “poetically apt”, thus indirectly pointing out that Bitcoin is a much better store of value than gold in his opinion.
More funds in the starting blocks
The ProShares Bitcoin ETF is not the only fund in play. The Valkyrie Bitcoin ETF Strategy, which will in turn debut on NASDAQ, is scheduled to launch this Friday. The company had planned to launch it under the acronym BTFD, but due to the connotations of the acronym expansion, it was changed to BTF.
The ETF launch, while groundbreaking, is worth noting that it is not based on the SPOT market. Nevertheless, it represents a milestone that has not been achieved before. More funds are seeking approval, and among them is Grayscale, which has applied for an ETF covered by real Bitcoin. This is the investment form that the largest number of investors are waiting for. The approval and launch of this variant is likely to have a very significant impact on the further fate of Bitcoin valuation.