Bitcoin Futures ETF Exceeds Expectations, Trades $1 Billion On Day One
October 20 2021 - 6:44AM
NEWSBTC
The numbers are in, and the Bitcoin Futures ETF had the biggest
debut of the year. By far. We have to “exclude ETFs where their Day
One volume was literally one pre-planned giant investor or BYOA,”
but that’s fair. Apparently, the ProShares Bitcoin Strategy ETF got
to the top naturally, via real trades by real people and
institutions. Considering that just its approval by the SEC seemed
to catapult Bitcoin’s price to the edge of an All-Time High, a
question arises. How will the market react tomorrow? And the day
after that? Related Reading | Bitcoin ETF Check, What’s Next For
BTC But let’s avoid speculation and check Senior ETF Analyst for
Bloomberg, Eric Balchunas’ charts: If we don't exclude ETFs where
their Day One volume was literally one pre-planned giant investor
or BYOA (not natural), it still ranks #2 overall. Here's that list.
The reason some of these shouldn't be included IMO is they don't
really represent grassroots interest. pic.twitter.com/wmZiHnpFrS —
Eric Balchunas (@EricBalchunas) October 19, 2021 Considering the
first-ever Bitcoin Futures ETF “also traded more than 99.5% of all
ETFs,” it’s fair to say the launch was a huge success. What does it
mean for the following ETFs? According to Balchunas, it’ll be hard
for them to succeed. “Every day counts because once an ETF gets
knows as ‘the one’ and has tons of liquidity, it’s virtually imposs
to steal.” And, what does this mean for the market in general?
NewsBTC already covered this question: “Although these ETFs have
attracted criticism for being backed by futures contracts and not
the underlying asset, they could still have big implications for
Bitcoin — allowing tax-sheltered and retirement accounts to easily
get exposure, and potentially opening the cryptoasset to a much
broader audience.” The NYSE welcomes @ProSharesETF in celebration
of the first U.S. 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 this question
than the SEC’s chairman himself, Gary Gensler told CNBC:
“What you have here is a product that’s been overseen for four
years by the U.S. federal regulator CFTC, and that’s being wrapped
inside of something within our jurisdiction called the Investment
Company Act of 1940, so we have some ability to bring it inside of
investor protection.” So, the Bitcoin Futures ETF falls under
the Commodity Futures Trading Commission jurisdiction. Plus, it
tracks the Chicago Mercantile Exchange (CME) Bitcoin futures. And
the SEC considers that the institutional support will protect the
customer. According to them, the underlying asset, Bitcoin, is too
volatile and subject to manipulation. The first persons to propose
a Bitcoin ETF in the USA, the Winklevoss twins, lament that when
they did the price of Bitcoin was $68 and nowadays is $64K. “That’s
almost a 1000x return in the meantime. I’m glad we got here, but it
has taken too long.” When @cameron and I first proposed a bitcoin
ETF in July 2013, the price of bitcoin was $68. Today, upon the
launch of two bitcoin futures ETFs, the price of bitcoin is
$64,000. That's almost a 1000x return in the meantime. I'm glad we
got here, but it has taken too long. — Tyler Winklevoss (@tyler)
October 19, 2021 Also a skeptic of the Bitcoin Futures ETF‘s long
term potential, Anthony Bertolino, VP of growth at iTrustCapital,
told CNBC: “The launch of the first bitcoin-linked ETF in the U.S.
will bolster the broader crypto market and help an entirely new
investor class experience the benefits of bitcoin as a legitimate
asset. However, a derivatives-based bitcoin ETF is not where we
want to be long-term.” BTC price chart for 10/20/2021 on Forexcom |
Source: BTC/USD on TradingView.com What Are The ProShares Bitcoin
Strategy ETF’s Characteristics? The next few days will be crucial
for this story. There’s a possibility that today’s demand was
orchestrated, at least in part. If this happened, it’ll be very
obvious in the following days. In any case, the fund’s official
site defines the first Bitcoin Futures ETF as: “ProShares Bitcoin
Strategy ETF (BITO) is the first U.S. bitcoin-linked ETF offering
investors an opportunity to gain exposure to bitcoin returns in a
convenient, liquid and transparent way. The Fund seeks to provide
capital appreciation primarily through managed exposure to bitcoin
futures contracts.” Related Reading | Grayscale Investments Set to
File for Bitcoin Spot ETF as Competition Heats Up And alerts the
clients that “The fund does not invest directly in bitcoin,” and
that “The price and performance of bitcoin futures should be
expected to differ from the current “spot” price of bitcoin.”
Forewarned is forearmed. Featured Image: Screenshot of the ETF's
opening bell ceremony| Charts by TradingView
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Apr 2023 to Apr 2024