Assets under management of the first US exchange-traded fund based on bitcoin futures exceeded $ 1 billion. Will institutional players continue to invest in Bitcoin Strategy ETF and how will this affect the value of the cryptocurrency?
In two days of trading, assets under the management of the exchange-traded fund Bitcoin Strategy ETF (ticker BITO) of the ProShares company exceeded $ 1 billion. The fund broke the record for the growth rate to $ 1 billion, which was held for 18 years. Until today, the leadership belonged to the "gold" exchange-traded fund (ticker GLD) – it managed to reach $ 1 billion in three days in 2004.
The Bitcoin Strategy ETF is the first U.S. exchange-traded fund based on bitcoin futures from the Chicago Mercantile Exchange (CME Group) and approved by the Securities and Exchange Commission (SEC). The Bitcoin Strategy ETF started trading on October 19 on the New York Stock Exchange (NYSE). On October 21, it became known that the SEC approved two more exchange-traded funds based on bitcoin futures from VanEck and Valkyrie Invesments .
On October 20, the price of bitcoin updated its historical maximum above $ 67 thousand. At 13:40 Moscow time on October 21, the asset is traded at $ 65.9 thousand. Its capitalization is $ 1.22 trillion, according to CoinGecko. During the day, the cryptocurrency has risen in price by 3%.
Analysts at investment bank JPMorgan believe that the reason for the new all-time high in bitcoin is not the launch of the first bitcoin ETF in the United States, but the rise in inflation. The bank claims that the Bitcoin Strategy ETF is unlikely to attract a lot of funds into the first cryptocurrency.
Topplabs.org experts predicted whether the popularity of cryptocurrency exchange-traded funds will grow in the future and how this might affect the digital asset industry.
Bitcoin-ETF will definitely be in demand from investors and will increase the number of institutions in the cryptocurrency industry, leading analyst at 8848 Invest Viktor Pershikov is sure. According to him, thanks to the exchange-traded fund based on bitcoin futures, investors received a regulated asset related to cryptocurrency, which can be accessed without any additional conditions directly from the trading terminal.
“In the coming year, the number of ETFs and regulated crypto products will increase, which will allow the digital asset market to be re-capitalized 2-3 times, to a level of $ 7-8 trillion,” the analyst predicted.
The popularity of exchange-traded funds based on crypto assets among investors will continue to grow, says Yuri Mazur, head of data analysis at CEX.IO Broker. In his opinion, reports of the curtailment of stimulus measures in the United States may somewhat slow down the pace of investments in bitcoin ETFs, but this will affect all financial instruments, not just crypto assets and related products.
What will happen to the crypto market
SEC approvals for several more applications to launch bitcoin futures ETFs were expected by the cryptocurrency community. This will be another trigger for market growth, says Gleb Kostarev, director of Binance in Eastern Europe. The record set by the Bitcoin Strategy ETF from ProShares in the first two days of trading supported Bitcoin's uptrend, which was the reason for its new all-time high.
“Investors are in no hurry to fix profits, the demand for bitcoin is quite high and will only grow, and those who prefer to fix profits now will be in an absolute minority,” Kostarev is sure.
Given the increase in the number of new market participants through new crypto products, the price of bitcoin will continue to grow against the backdrop of an increase in capitalization, Pershikov claims. According to his forecast, in the next couple of months, investors will continue to actively buy digital assets, since the launch of the first Bitcoin ETF in the United States is more significant than the start of Bitcoin futures trading on the Chicago Mercantile Exchange in 2017.