The numbers are in, and the Bitcoin Futures ETF made its biggest debut of the year. By far. We need to “rule out ETFs where their day-one volume was literally a preplanned giant investor, or BYOA,” but that’s fair. Apparently, the ProShares Bitcoin Strategy ETF came to the top naturally, via real trades from real people and institutions. Given that SEC approval alone seemed to catapult the price of Bitcoin to the verge of an all-time high, one question arises. How will the market react tomorrow? And the day after?
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But let’s avoid speculation and check out the Senior ETF Analyst for Bloomberg and Eric Balchunas’ charts:
If we don’t rule out ETFs where their day-one volume was literally a preplanned giant investor or BYOA (not of course), it still ranks second overall. Here is that list. The reason some of these shouldn’t be included in the IMO is because they don’t really represent the grassroots interest. pic.twitter.com/wmZiHnpFrS
– Eric Balchunas (@EricBalchunas) October 19, 2021
When you consider that the very first Bitcoin Futures ETF “also traded more than 99.5% of all ETFs”, it can be said that the launch was a great success. What does this mean for the following ETFs? According to Balchunas, it will be difficult for them to be successful. “Every day counts because once an ETF becomes known as ‘the one’ and has plenty of liquidity, it’s practically impossible to steal.” And what does that mean for the market in general? NewsBTC has already covered this question:
“While these ETFs have been criticized for being backed by futures contracts rather than the underlying asset, they could still have a big impact on Bitcoin – they allow tax-protected accounts and retirement accounts to easily get involved and open up the crypto -Asset possibly for a much wider audience. ”
NYSE Welcomes @ProSharesETF to Celebrate First US Bitcoin-Linked ETF $ BITO https://t.co/0qh0NDS2d4
– NYSE (@NYSE) October 19, 2021
Why is there a Bitcoin Futures ETF instead of a Bitcoin ETF?
Who better to answer that question than the chairman of the SEC himself, Gary Gensler told CNBC:
“What you have here is a product that’s been ruled by the CFTC for four years and that’s wrapped up in something within our jurisdiction called the Investment Company Act of 1940 so that we can put it in some kind of investor protection . ”
The Bitcoin Futures ETF therefore falls under the jurisdiction of the Commodity Futures Trading Commission. It also tracks the Chicago Mercantile Exchange (CME) bitcoin futures. And the SEC believes that institutional support protects the customer. Accordingly, the base value Bitcoin is too volatile and manipulable.
The first people to propose a Bitcoin ETF in the US, the Winklevoss twins, complain that the price of Bitcoin was $ 68 then and is now $ 64,000. “That is now almost a 1000-fold return. I’m glad we’re here, but it took too long. ”
When @cameron and I first proposed a Bitcoin ETF in July 2013, Bitcoin was priced at $ 68.
Today, after the launch of two Bitcoin futures ETFs, Bitcoin is priced at $ 64,000.
That is now almost a 1000-fold return. I’m glad we’re here, but it took too long.
– Tyler Winklevoss (@tyler) October 19, 2021
Anthony Bertolino, VP of Growth at iTrustCapital, also a skeptic about the long-term potential of the Bitcoin Futures ETF, told CNBC:
“The launch of the first Bitcoin-Linked ETF in the US will bolster the broader crypto market and help a whole new class of investors experience the benefits of Bitcoin as a legitimate asset. However, a derivative-based Bitcoin ETF is not what we want to achieve in the long term. ”
BTC price chart for 10/20/2021 on Forexcom | Source: BTC/USD on TradingView.com
What are the characteristics of the ProShares Bitcoin Strategy ETF?
The next few days will be crucial for this story. Chances are, today’s demand has been at least partially orchestrated. If this happened, it will be very evident in the next few days. In any case, the fund’s official website defines the first Bitcoin Futures ETF as:
“The ProShares Bitcoin Strategy ETF (BITO) is the first US Bitcoin-Linked ETF that offers investors the opportunity to participate in Bitcoin returns in a convenient, liquid and transparent way. The Fund seeks capital appreciation primarily through managed exposure to Bitcoin futures contracts. ”
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And advises customers that “the fund does not invest directly in Bitcoin” and that “the price and performance of Bitcoin futures are likely to differ from the current“ spot ”price of Bitcoin. Forewarned is armed.
Featured Image: Screenshot of the ETF's opening bell ceremony| Charts by TradingView