Bitcoin Rises as ETF is set to Launch: HODLers Hang On Tight
Bitcon’s stunning October rally got a big boost on Friday as news broke that the first Bitcoin ETF was set to launch in the U.S. early next week, with another to follow shortly.
“There it is! Bloomberg’s data team in the process of adding the ProShares Bitcoin Strategy ETF to the terminal,” tweeted analyst James Seyffart, as he posted a screenshot from a Bloomberg terminal showing the new fund’s name.
ProShares Bitcoin Strategy ETF (BITO) “seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts,” according to its filing. “The Fund does not invest directly in bitcoin.”
ProShares filed a post-effective amended prospectus Friday, indicating that the fund would launch on Monday. Trading may start Tuesday, The Wall Street Journal reports.
And while the U.S. Securities and Exchange Commission (SEC) remained publicly silent on the fund’s status, the amendment signaled it had been given the greenlight. Monday marks the end of the 75-day period in which federal regulators must comment on a filing. Without comment, the fund may proceed.
“After years of trial and error by would-be fund sponsors, cryptocurrency investing is finally opening up to the masses with the tacit U.S. approval of a bitcoin exchange-traded fund,” CoinDesk reported.
The news is just the beginning for Bitcoin ETFs.
“BITO appears to be the tip of a broader wave of bitcoin futures-based ETFs,” The Journal said. “Valkyrie Investments, Invesco and VanEck are likely to be cleared to roll out their own funds this month, followed by Galaxy Digital, AdvisorShares, Bitwise, BlockFi and ARK Investment Management in November and December, analysts said.”
A Bitcoin Strategy ETF from asset manager Invesco is also expected to launch next week.
And, the Valkyrie Bitcoin Strategy Fund also took another step toward trading as the NASDAQ sent a letter to the SEC confirming it approved the fund for listing. However, the fund has not yet passed the 75-day comment period.
Analysts point to the new SEC Chairman Gary Gensler’s comments about crypto as a catalyst for opening up the Bitcoin ETF market. Gensler has been outspoken about digital currencies, often referring to the market as the “wild west,” and stressing that there is not yet enough regulation to protect investors.
While Gensler expressed caution, he did open the door to considering ETFs through existing regulation known as the Investment Company Act or ’40 Act.
“When combined with the other federal securities laws, the ’40 Act provides significant investor protections," he said.
With all the anticipation and fanfare surrounding the ETF news, it should be noted that the supply of Bitcoin circulating is extremely low, according to industry analysts. That’s no surprise to the HODLers. As the price soared above $60,000 this week, traders commenting on social media reinforced their long-term position with the world’s first digital currency.
As Michael Saylor, founder of MicroStrategy tweeted Friday: “You do not sell your #Bitcoin.”
Joyce Pavia Hanson