By Dima Kulakov
The first bitcoin futures ETF from a big US ETF provider, ProShares, will begin trading sometime this week (on New York Stock Exchange), marking a milestone in the outreach of the crypto industry.
An ETF, which stands for “exchange traded fund,” is an asset that trades on the open market like a stock and is available to regular retail investors. Some investment companies already have products that offer exposure to bitcoin, but they are only available to qualified wealthy investors in over-the-counter markets, where shares often trade at a price that does not match the underlying cryptocurrency, making them even more speculative that the underlying instrument itself.
The US Securities and Exchange Commission (SEC) had not formally approved the creation of this ETF as of now, and the agency may never make a formal declaration of approval for it due to the oftentimes sceptical attitude of national regulators regarding cryptocurrencies; as an extreme example, Chinese authorities recently declared cryptocurrencies illegal. Developed countries’ financial authorities practice a more realistic approach towards cryptocurrencies, but they still consider them very risky, volatile investments that are not always suitable for regular investors. ProShares’ announcement indicates that the SEC is unlikely to block the listing at this point. Nevertheless, the approval of a futures ETF for bitcoin will be seen as only a partial victory for the crypto industry, as the outlook for a fund that tracks the spot-market price of bitcoin remains unclear.
The NYSE certified “its approval for the listing,” meaning that the exchange will allow investors to trade the ETF sometime this week under the ticker “BITO.”
Crypto advocates have been working for years to convince the SEC to approve an ETF related to bitcoin, and its arrival will certainly attract more investors to trading digital currencies.
News of the ETF’s listing boosted the price of bitcoin. The cryptocurrency has jumped “more than 10% over the past week and exceeded $61,000 on October 15 (all-times high).”Predictions about the future value of bitcoin differ wildly, in a way, demonstrating the extreme volatility of the asset. Fidelity Investment’s (one of the world biggest asset managers) director of global macro Jurien Timmer said last week that bitcoin could reach 100,000 USD in a couple of years, whereas famous “global disruptor” investor Cathie Wood thinks that the cryptocurrency may rise tenfold over the next five years.