Tuesday marks the official debut of the first bitcoin exchange-traded fund. ProShares has confirmed that its much-anticipated bitcoin ETF will begin trading on the New York Stock Exchange on Tuesday under the ticker “BITO.”
ProShares CEO Michael L. Sapir said in a statement Monday that a multitude of investors have been eagerly awaiting the launch of a bitcoin-linked ETF.
By utilizing Bito, investors who already own a brokerage account and have experience buying stocks and ETFs can now access bitcoin without establishing a new account with a crypto provider, as these companies are unregulated and may pose security risks.
The price of bitcoin soared by more than 3% on Tuesday morning trading near $63K, according to Bitstamp. Bitcoin investors are eagerly watching for bitcoin to jump above $64.8k this week to reach a new all-time high.
For the still young crypto industry, the new Bitcoin ETFs are also a significant regulatory achievement that will help cement crypto’s place in the heavily regulated world of finance. More ETFs may begin trading this month. This week could see a second futures-based ETF.
According to experts, this is probably the biggest endorsement of crypto from the SEC, whose regulators have opposed crypto for years and hindered widespread adoption by retail investors. The Crypto space will be flooded with new capital and new people because of this.
As of right now, none of these ETFs invest directly in bitcoin, which is what the crypto industry ultimately wants.
As many as 10 asset managers have sought approval to launch bitcoin ETFs since 2017, which would enable investors to buy bitcoin itself, as opposed to derivatives linked to it. In all cases, they were rejected by the Securities and Exchange Commission under Jay Clayton. All failed to prove that the market is resistant to manipulation. An influx of bitcoin futures ETF applications followed Gary Gensler’s August speech in which he said he would favor investment vehicles that include futures.
Investing directly in bitcoin would be different from investing in a futures-based ETF. Futures contracts set the price at which an asset will be purchased or sold at a future date. The return a futures investor captures on top of the change in the price of the underlying asset is the annualized roll yield. Futures ETFs track cash-settled futures contracts, not an asset’s price.