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What first bitcoin futures ETF means for cryptocurrency industry


Bitcoin’s (BTC), value has surpassed the threshold of $66,895 dollars, for the first time ever in Bitcoin’s history.

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Investors started trading cryptocurrency this week, marking a significant milestone in the history of cryptocurrency. first U.S. bitcoin futures exchange-traded fundIt is more than any other ETF launch. another followed Friday 

This fund invests in Bitcoin Futures Contracts, which are agreements to purchase or sell bitcoin later at a agreed-upon rate.

Trading with these products is possible through your regular investment account, without having to deal with the security and hassle of crypto exchanges.

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While the new offerings fall short of what the industry eventually wants — ETFs investing in the currency itself — it didn’t slow excitement for the first launch.

It ProShares Bitcoin Strategy ETF(ticker: BITO), which raked in $550million from crypto-hungry investor, saw the largest first day ever for ETFs. More than $1.01 trillion worth of shares were exchanged. according to Morningstar 

Furthermore, there is a price bitcoinSpiked by more than 4% on TuesdayCoin Metrics reported that the price rose to $64,206.51. $66,900 on WednesdayThis achievement surpasses the intraday record of $64,899 set in April by mid-April.

“The original intention [of bitcoin]Morningstar director Ben Johnson said that the goal of all ETF research was “to upend traditional finance”.

He said that instead, “traditional finance” has captured bitcoin and reeled in it. Wall Street will make billions if it doesn’t by creating this new ecosystem.

Deferred approvals of the bitcoin ETF

For nearly a decade companies have been pushing for the release of the first U.S. Bitcoin ETF. The Securities and Exchange Commission, however, has been reluctant to accept the asset due to concerns over the absence of regulation and lack thereof. potential for fraud and manipulationIn the Bitcoin market 

Johnson said that U.S. regulators have exhibited a general conservatism. Johnson was referring to the landscape of bitcoin ETF filings which were being amended, abandoned applications, and other debris. 

Previously, most bitcoin ETF applications have been based on so-called spot markets, or investing in the currency directly, explained Stephen McKeon, associate professor of finance at the University of Oregon in Eugene and partner at Collab+Currency, a cryptocurrency-focused investment fund.  

There was however a change in August, when Gary Gensler, chairman of the SEC, indicated that the agency might be open to futures-backed Bitcoin ETFs under the Investment Company Act of 40, which regulates mutual funds, and could offer investors “significant investor protection.”

I don’t think the SEC is in any big hurry to move forward and allow direct investment in bitcoin by ETFs anytime soon.

Ben Johnson

Morningstar’s Director for ETF Research

This week, approvals were delayed due to a flood of applications.

Gensler indicated that regulators could offer investor protection because the Commodity futures Trading Commission monitors U.S.-based bitcoin futures, and ETF wrappers falling under its jurisdiction. Gensler made the remarks on CNBC’s”Squawk on the StreetThis week. He warned that it is still “highly speculational asset class”.

The SEC will approve some other ETFs that trade in bitcoin futures. However, it isn’t clear when and if the agency might allow an ETF to invest directly in Bitcoin.

Johnson stated that Johnson did not believe the SEC was in a hurry to allow bitcoin direct investments by ETFs.

How to invest before you make a purchase

He said that while it may be possible, it is “massively hazardous” to a significant portion of someone’s investment portfolio.

Advisors suggest that a little bit of dabbling is not a problem once you have reached your retirement goals and are on the right track to achieving them.  

Jordan Benold (certified financial planner) said that clients can invest in the fund regardless of their lifestyle or budget. He also explained how people make “fun” money.

Investors may be faced with a wide range of options when more products based on crypto are released.

McKeon said that Bitcoin was only the tip. In the next few years, we will see ETFs that are exposed to many crypto assets.