The price of Bitcoin rose more than 4% this Tuesday, after the successful launch of the first ETF for the cryptocurrency in the United States.
Bitcoin, the cryptocurrency global market leader, is very close to reaching its all-time high price in April and marking a new ATH (All Time High). CoinGecko data shows that this Tuesday Bitcoin (BTC) reached a value of $64,608.3 per unit, being less than 200 dollars (0.4%) from reaching its maximum value of all time. Last April, the cryptocurrency reached a value of 64,804.7 dollars per BTC.
Source: CoinGecko
The upward momentum in the price of Bitcoin is mainly related to the approval and launch of the first Bitcoin futures ETF (exchange-traded fund) in the United States. Last Friday, the country’s Securities and Exchange Commission (SEC), led by Gary Gensler, gave its approval and approved the ETF presented by the investment firm ProShares, after some 8 years rejecting the possibility of creating a financial instrument of this type for Bitcoin on US soil.
BITO, as he is called ProShares Bitcoin Strategy ETF, was listed on the New York Stock Exchange yesterday and had a successful debut. The ProShares ETF is the first of its kind to expose investors to futures contracts based on the CME in the United States.
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Bitcoin-ETFs: More than $1,000 million on the first day
On its first day on the market, BITO reached a trading and trading volume of $1,005 million, ranking among the most in-demand ETFs in the market. Being the first stock index fund of its kind available in the country, related to Bitcoin futures, the interest and demand of investors and traders for this instrument skyrocketed. This Tuesday, a total of 24,417,166 shares were traded, with an average value of 41.1 dollars per share.
The actions of ProShares Bitcoin Strategy ETF they opened yesterday at 13:30 UTC with a value of $40.8 per unit and skyrocketed in no time. Within about ten minutes of opening, the shares reached a value of $42.1 per unit, showing an increase of more than 3% and highlighting the great interest of investors. However, BITO shares closed at $41.9, as data provided by the NYSE Arca shows.
Source: NYSE Ark
Although the ProShares ETF does not track the price of Bitcoin directly, analysts consider that this index fund will cause an increase in open interest on Bitcoin futures contracts and will create greater buying pressure in the spot market, increasing demand and, therefore, the price of the cryptocurrency. Dave Nadig, Director of Investments and Research at ETF Trends, said told CNBC that trading seen Tuesday with BITO on NYSE Arca was dominated by retail investors.
Gary Gensler, chairman of the SEC, also pronounced about the ProShares ETF, stating that although it is an SEC and CFTC regulated product, it is still highly speculative and volatile. Gensler also said that BTC futures ETFs will open the doors to a greater number of investors who want exposure to the cryptocurrency without the risks involved in storing it.
The second Bitcoin futures ETF in the United States may debut as soon as this week, if the fund presented by Valkyrie Investment receives SEC approval to list on the Nasdaq.
Image from Straits Times
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