Bitcoin, what changes with the first futures ETF
by Chiara Rossi
On October 19, the first ETF (passively managed investment fund) on bitcoin futures will debut at NYSE. Facts and analyzes on the role of the Sec
The wait for an exchange-traded fund (ETF) based on bitcoin futures has come to an end.
Tomorrow morning, October 19, the ProShares group will launch the exchange-traded fund on the New York Stock Exchange linked to Bitcoin futures.
This was announced by the same company that managed to get the green light from the SEC (the US stock exchange authority). A milestone for the cryptocurrency industry summarized by the New York Times.
As Radiocor recalls, the SEC “in the last four years had rejected the launch of at least 10 ETFs, under the direction of Jay Clayton. In August, the new director Gary Gensler had instead opened the possibility of investment vehicles of this type “.
To anticipate the green light, a prudential tweet released by the SEC on Friday thought: “Before investing in a fund that holds bitcoin futures contracts, be sure to carefully weigh the potential risks and benefits”.
Given the optimism of operators for the green light, bitcoin crossed the $ 60,000 mark for the first time since April, reaching $ 62,000 at the weekend.
Three more bitcoin futures ETFs are now expected to move forward with their launches this month.
As Finimize pointed out, this news is also positive for bitcoin trading platforms and mining companies, given the push that will give access to cryptocurrencies and, at the same time, the interest of investors.
All the details.
THE DEBUT OF THE PROSHARES ETF
The ProShares ETF, which will follow the bitcoin futures market, will begin trading on the New York Stock Exchange on Tuesday under the ticker “BITO,” the company confirmed.
“We believe multitudes of investors have eagerly awaited the launch of a bitcoin-related ETF after years of effort to launch one,” ProShares CEO Michael L. Sapir said Monday. “BITO will open bitcoin exposure to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but don’t want to deal with the hassle and learning curve of creating another account with a cryptocurrency provider… or fear that these providers may be unregulated and subject to security risks ”.
THE PRICE OF THE BITCOIN
In anticipation of the ETF’s debut, bitcoin’s price was around $ 60,000 this morning after rising to $ 62,000 over the weekend, according to Coin Metrics.
WHAT IT MEANS FOR CRYPTOCURRENCIES
As CNBC recalls, investing in a futures-based ETF is not the same as investing directly in bitcoin. A futures contract is an agreement to buy or sell an asset at a future date at an agreed price. A futures ETF will not allow investors to buy bitcoins directly, but it is still an important achievement for the cryptocurrency industry.
THE COMMENT OF THE ANALYSTS
“This will likely be the SEC’s biggest backing for cryptocurrencies,” said Ian Balina, CEO of data and analytics firm Token Metrics, who also noted that regulators around the world have been at odds with the cryptocurrency industry. cryptocurrencies for years and “have hindered the acceptance of cryptocurrencies” by retail investors.
“This will be a dam of new capital and new people in space.”
“This is an exciting step but not the last,” Douglas Yones, NYSE’s chief trading officer, told DealBook. He expects a number of cryptocurrency-linked ETFs to gain approval eventually.
The E.T.F. tomorrow’s launch is another sign of mainstream cryptocurrency legitimacy in a year of industry milestones. Starting with the IPO of the cryptocurrency exchange Coinbase which took place last April until the approval of a Volt ETF (Exchange Traded Fund) that invests in technology companies with exposure to bitcoin and support infrastructures by the SEC earlier this month.
Cryptocurrencies, because the OK Sec of an ETF with exposure to Bitcoin is revolutionary
by Chiara Rossi
In the United States, the SEC has approved an ETF that invests in technology companies with bitcoin exposure including Tesla, Square, Coinbase, PayPal and Twitter
Step forward by the United States Securities and Exchange Commission (Sec) – the American Consob – towards cryptocurrencies.
On October 5, the SEC approved a Volt ETF (Exchange Traded Fund) that invests in technology companies with exposure to bitcoin and supporting infrastructure. The portfolio includes Tesla and Twitter companies.
As Business Insider points out, this marks a significant step forward for the cryptocurrency market. So far, the SEC has not approved ETFs with direct exposure to bitcoin.
But this new exchange-traded fund could be as close to investors as possible to have a US bitcoin ETF, analysts believe.
Meanwhile, Bitcoin, after a stellar run during the week, up 25% on Friday, saw a slight drop in valuation to 2.84%. After surpassing $ 56,000 on Thursday, the world’s highest-value cryptocurrency traded at around $ 55,500. Bitcoin’s rapid surge this week stopped well below its all-time high of around $ 65,000, but with a market cap of over $ 1 trillion, on the back of good news for the industry.
All the details.
SEC APPROVES VOLT EQUITY ETF
The US Securities and Exchange Commission has approved Volt Equity’s ETF, which aims to monitor companies that hold the majority of their net assets in bitcoin or derive most of their profits or income from bitcoin-related businesses such as the mining, lending or manufacturing mining equipment, Tad Pak, CEO of the fund, told Insider.
The prospectus defines these companies as Bitcoin Industry Revolution Companies.
WILL NOT INVEST DIRECTLY IN BITCOIN BUT ALMOST
As a result, Volt Etf will not invest directly in bitcoin. Instead, it seeks to put at least 80% of its net worth in “companies of the bitcoin revolution”, options and ETFs with exposure to those companies. The remainder will go into broad equity markets to offset the portfolio risk.
THE SHARES OF TESLA, SQUARE AND PAYPAL IN THE FUND
Pak added that the fund will consist of shares of around 30 companies, including Tesla, Square, Coinbase, and PayPal. He also said Volt has decided to include Twitter, which recently included Bitcoin in its operations, and Bitcoin mining companies like Marathon which also hold the currency in their corporate treasuries.
THE FUND PROJECTS
CEO Pak told Insider that he hopes to go public on the New York Stock Exchange in the next three weeks.
“I am a strong supporter of bitcoin and I was really excited to launch an ETF that could take advantage of the upcoming bitcoin revolution,” he told Insider. “We can get exposure to bitcoin without necessarily holding the currency, especially with options positions.”
APPROVAL OF BITCOIN ETFS POSTED
This indirect investment strategy is necessary because the SEC under the presidency of Gary Gensler has postponed the approval of bitcoin ETFs amid fears of potential market manipulation, Insider recalls. The United States has not yet approved one.
According to Eric Balchunas, Bloomberg’s Senior ETF Analyst, the first Bitcoin futures ETFs are very likely to be approved by the end of October.
ALREADY AVAILABLE IN CANADA
In Canada, however, bitcoin ETFs are available.
Like the Canadian Purpose Bitcoin ETF: it got the green light earlier this year and was a huge success among institutional investors.