Bitcoin has launched an exchange traded fund. Credit: Onov3065, CC BY-SA 4.0
The first Bictoin-linked exchange traded fund officially went live on Tuesday. The ProShares Bitcoin Strategy ETF started trading at $40 a share when it opened on Tuesday, and was up 5% by the time the market closed.
The ProShares fund is the ETF to be traded on Wall Street, but the Securites and Exchange Commission is expected to approve several other ETFs that have applied.
Although experts have recently cast doubts on cryptocurrency’s stability, with some even issuing stark warnings on the potential for the currency to precipitate an economic collapse, the anticipation ahead of the ETF’s launch on Wall Street has caused Bitcoin to pump in value, with the coin reaching $64,000 on Tuesday.
Thats a 40% increase from its September value of $44,000. The digital currency is now just slightly bellow its all-time high price of 64,888.
The surge has caused crypto’s supporters to be optimistic for the future of the industry:
“The ETF approval is a watershed moment for the industry,” Bitcoin Foundation chairman Brock Pierce told CNN Business. “This moment is long-awaited, as numerous entrepreneurs and firms have sought approval from regulators since as early as 2013.”
“Today begins an era where retail investors can invest directly into Bitcoin through the ETF, and serves as further validation of Bitcoin and cryptocurrencies across the country and on a global basis,” said Peirce.
“We believe a multitude of investors have been eagerly awaiting the launch of a bitcoin-linked ETF after years of efforts to launch one,” ProShares CEO Michael Sapir said in a statement Monday.
Those bullish on bitcoin believe that ETF’s will make cryptocurrency more accessible to normal investors, demystifying cryptocurrency and removing the process of mining.
“BITO will open up exposure to bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider,” ProShares CEO Michael Sapir told CNN Business. Sapir is referring to ProShare’s ticker symbol, BITO.
SEC approves first Bitcoin ETF, helping to normalize crypto
There are also hopes that ETFs will eliminate some of the fear generated by Bitcoin’s critics, who have compared cryptocurrency to Ponzi schemes.
“We believe that if regulators are comfortable with ETFs that hold futures of a given asset, they should also be comfortable with ETFs that offer exposure to the spot price of that same asset,” said Dave LaValle, global head of ETFs at Grayscale Investments. “GBTC proves that there’s strong investor demand for physically-backed bitcoin investment vehicles.”
“The availability of a Bitcoin futures ETF is a big step for bitcoin awareness and regulation for the crypto industry,” Christine Brown, COO at Robinhood Crypto, said in a statement made to CNN Business. “After the SEC previously rejected several applications for these types of funds, the ETF going live on brokerages opens the door for a new group of investors.”
