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Bitcoin’s first ETF hits the New York Stock Exchange

For the first time since April, Bitcoin went through the $60,000 price barrier over the weekend. The expectation that the SEC will approve a Bitcoin futures exchange-traded fund explains the price movement. That expectation turned to reality on Monday.

Bitcoin's first ETF hits the New York Stock Exchange on Tuesday

Image Source: Yahoo Finance

First Bitcoin ETF debus on the NYSE

On Tuesday, ProShares, an exchange trading company, will debut on the New York Stock Exchange an ETF that follows Bitcoin futures. The company stated that it will be listed as “BITO”.

“BITO will provide exposure to bitcoin to a large segment of investors who already have a brokerage account and are comfortable buying stocks and ETFs, but don’t want to go through the hassle and learning curve of opening a second account with a cryptocurrency provider,” said ProShares CEO Michael Sapir in a statement.

Bitcoin is currently trading at $61,910, close to its all-time high of $64,800 set on April 14. The cryptocurrency has had a turbulent year. Last September, the price of bitcoin began to skyrocket, rising from just under $12,000 at the start of the month to over $60,000 by April.

In May, a slew of negative news, including Elon Musk’s withdrawal of blanket support for Bitcoin and China’s crackdown on cryptocurrency businesses, caused the price to plummet. Bitcoin temporarily dipped below $30,000 in July.

Futures contracts bind investors to buy or sell a commodity at a certain price on a predetermined date. You may, for example, promise to purchase one Bitcoin for $100,000 in five years. You would have made money if the price of a Bitcoin on that date was $200,000. You would have lost money if the price of a Bitcoin on that date was $50,000.

A future ETF differs from a standard exchange-traded fund, which Bitcoin enthusiasts have been advocating for. A standard ETF gives investors exposure to the underlying asset, in this case, Bitcoin, whereas a Futures ETF lets them bet on how much the asset will cost. Policymakers have already said that cryptocurrency is too prone to fraud and manipulation to be used in ETFs backed by actual Bitcoins.

Regardless, the SEC’s inclusion of cryptocurrencies in its framework is clearly enough to strengthen Bitcoin and many other currencies. Bitcoin is currently trading at $8, up 8 percent from last week. The most frequently used cryptocurrency, Ethereum, is up 6.5 percent from a week ago.

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Also read: “Polkadot” founder announces $774 million fund for DeFi

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