Bitcoin ETF Sets Record, Sending BTC Hurtling to a New ATH
The moment the whole crypto community has been waiting for is finally upon us: The market’s first Bitcoin Exchange Traded Fund (ETF) has finally been approved.
Debuting on the NY Stock Exchange this past Tuesday, shares of the first US Bitcoin linked ETF jumped 4.8%, managing to close at $41.94. The fund, ProShares Bitcoin Strategy (BITO), tracks CME Bitcoin futures and their contracts. After the customary ringing of the bell, the product topped $1 billion in trading volume on its first day alone, setting a record for one of the top ETF debuts ever. The price of BTC naturally also rose, hitting a new all-time high of $66,975 — marking a 45% increase in its price during this past month.
Let us take a moment to clarify: What are ETFs and how do they work?
ETFs are pooled investments (also known as baskets) of securities that can be purchased through a brokerage firm on a stock exchange. Popular amongst active and passive investors alike are purchased and sold much like a stock, typically have lower fees than other types of funds, and contain assets that may be unavailable to consumers given their individual price points. Further, institutional players and gun-shy investors who do not want to purchase crypto due to the volatility associated with the space are likely to lunge at this financial instrument given the ETFs balanced risk profile.
Will the launch of the Bitcoin ETF affect Bitcoin itself?
The price of Bitcoin was heavily impacted by this historic event, helping it notch a fresh all-time high of $66,975. Ether followed suit and also surged 7.4%, crossing the $4,100 mark and approaching its previous all-time high steadily.
Are ETFs based on other coins and tokens on the horizon?
Back in July, a commissioner for the SEC named Hester Peirce made waves in the industry when he revealed that he thought Bitcoin ETFs were long overdue, a sentiment that the current SEC chairman clearly echoes.
This ETF brings legitimacy and attention to the world of crypto in general and Bitcoin in specific. Should these products be traded without any issues, many believe that the SEC may open doors to other similar ETFs, bringing crypto to the forefront of the investment world and bridging the gap between cryptocurrency and traditional financial markets.
For more on the SEC’s crypto regulation, watch the video below:
Each week, we compile the most important stories to shed light on crypto investment opportunities. Sign up to our newsletter and stay up to date on the latest happenings in the market!