The Bitcoin Futures Exchange Traded Fund (ETF) of asset management company ProShares will be officially listed on the New York Stock Exchange on Tuesday under the symbol BITO. The price of Bitcoin rose to US$62,000 at the end of last week. As of press time, the price of the cryptocurrency is approximately US$61,346.5 per coin.
ProShares CEO Michael Sapir said in a statement on Monday: “We believe that after years of hard work, many investors are eagerly waiting for the launch of Bitcoin-related ETFs. Some cryptocurrency investors may not be willing to invest in cryptocurrency. Providers open another account. They are worried that these providers are not regulated and have security risks. Now, BITO provides investors with the opportunity to access Bitcoin through familiar forms and investment methods.”
There are four other companies that also hope to promote their Bitcoin ETF this month, and the Invesco ETF may be listed as early as this week.
Ian Balina Bio, CEO of data and analysis company Token Metrics, said: “This may be the largest endorsement of cryptocurrency by the U.S. Securities and Exchange Commission (SEC).” He also pointed out that global regulators have been at odds with the cryptocurrency industry for many years. , Hindering the acceptance of cryptocurrency by retail investors. This move “or will open the floodgates of new capital and new talents into this field.”
Since 2017, at least 10 asset management companies have sought approval to launch bitcoin spot ETFs, which will provide investors with a tool to buy bitcoin itself, rather than bitcoin-related derivatives. At the time, the SEC, led by Jay Clayton, rejected these proposals unanimously and insisted that none of these proposals showed resistance to market manipulation. SEC Chairman Gensler stated in a speech in August that he would favor investment tools including futures, and the application boom for Bitcoin futures ETFs followed.
Investing in futures-based ETFs is not the same as investing directly in Bitcoin. A futures contract is an agreement to buy and sell assets at an agreed price on a certain day in the future. ETFs based on futures contracts track cash-settled futures contracts, not the price of the asset itself.
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, said: “If you take into account the annualized rollover rate of return, the total cost of futures-based ETFs may be between 5% and 10%.” Bitwise Asset Management also submitted its own to the SEC. Bitcoin futures ETF application.
Hougan also added: “Futures-based ETFs are more confusing. They face challenges such as position restrictions and official dilution, so they cannot have 100% access to the futures market.”
ProShares, Valkyrie, Invesco and Van Eck four Bitcoin futures ETFs will be evaluated in October. They are allowed to go public 75 days after filing the documents, but only if the SEC does not intervene during this time.
Many people hope that the smooth listing of these ETFs will pave the way for Bitcoin spot ETFs in the near future. In addition to Gensler’s preference for futures-based ETFs, since the first wave of ETF applications, the market in this industry has become more developed in the short term. Over the years, the SEC has been challenging the crypto industry to prove that in addition to the Bitcoin spot market, there is a large regulated market. Research submitted by Bitwise to the SEC last week also confirmed this claim.
Hougan said: “The Bitcoin market has matured. The Chicago Mercantile Exchange’s Bitcoin futures market is actually the main source of discovery for the entire Bitcoin world. The price of the Chicago Mercantile Exchange market will precede Coinbase (COIN.US), Prices in the Kraken and FTX markets fluctuate. Therefore, it may hinder the SEC’s approval of spot ETFs.”
He added that the data also shows that more money has been invested in the Chicago Mercantile Exchange’s Bitcoin futures market. “The crypto market was initially dominated by exchanges such as Coinbase, and then by exchanges such as BitMEX and Binance. No one has set new records or worked hard to make breakthroughs. These breakthroughs indicate that the market has changed.”