Tomorrow, the first bitcoin exchange-traded fund (ETF) in the United States is expected to move to the New York Stock Exchange.
The ProShares Bitcoin Strategy ETF, which will be traded under the ticker symbol BITO, will invest “primarily” in bitcoin futures, according to a pronouncement of the planned launch.
This new fund may be offering investors a significant opportunity to get exposed to bitcoin without a virtual currency exchange like Coinbase or Kraken.
[Editor’s note: Investing in cryptocurrencies or tokens is highly speculative and the market is largely unregulated. Anyone contemplating this will be willing to lose their entire investment. ]
However, everyone gave a positive view of this development, with a recent MarketWatch article, written through marketplace editor Mark DeCambre, highlighting the considerations expressed through Registered Investment Advisors (RIA).
The article quoted Ben Cruikshank, director of the investment platform Flourish, which is owned by MassMutual and works with RIA which, in total, exceeds one trillion dollars in asset management.
“The corporations we communicate with are incredibly skeptical” about a bitcoin ETF on futures, he said.
“The feedback I get is derivative, it’s a less effective form of ownership,” Cruikshank said.
In addition, the RIA noted that the bitcoin ETF programmed to go live is a “complicated term product,” which is less undeniable than opening an account on Coinbase.
“It’s hard to justify a shorter-term product,” Cruikshank said. “It’s less my comments than what corporations tell me. “
Several analysts weighed in on those concerns, their views.
“Cruikshank is all about money,” said Ben Armstrong, founder of BitBoy Crypto.
“Spot Bitcoin that wants to settle in Bitcoin is much more bullish than paper-settled futures. “
“But don’t let that take the shine off a futures ETF as a whole,” he said.
“It’s a paradigm shift. And it provides old-school investors who have exposure to Bitcoin. “
“It’s just one step toward adoption, which everyone loves to see in cryptocurrencies. “
Shone Anstey, director of corporate network infrastructure LQwD Fintech Corp. , also addressed this issue.
He noted that the bitcoin futures ETF would result in higher prices and complexity for a money fund.
However, this progression “represents a regulatory victory for the Bitcoin industry and would possibly inspire the SEC to approve a Bitcoin spot price ETF. “
Armando Aguilar, vice president of virtual asset strategy at Fundstrat Global Advisors, expressed his opinion.
“A futures-based ETF is rarely what everyone expected, however, it is a step in the right direction as virtual assets become more widespread,” he said.
Silvia Jablonski, co-founder and lead investment director of Defiance ETF’s ETF sponsors, commented on the situation.
“This is very exciting news that Bitcoin in ETF format will be traded in the US markets tomorrow,” he said.
“This opens up the world of crypto to the masses like never before. “
“Is it the vehicle for investors? Well, it’s up to the investor,” Jablonski said.
“Assuming the investor isn’t mining cryptocurrencies or not comfortable with the garage in a virtual wallet, the next, simplest and way to get natural exposure to Bitcoin is to buy the physical asset/currency,” he said.
“Perhaps the time of selection is to take a look at the trusts that invest in cryptocurrencies. They are the major players in terms of publicly traded fund structures and are already operating in the momentary market (such as Grayscale and Bitwise),” Jablonski said.
“The ETF is the third derivative of Bitcoin’s exposure through a publicly traded envelope,” he said.
“For investors who are new to crypto trading and are comfortable with the aforementioned tactics for gaining direct access, futures-based ETFs are a smart alternative. “
However, it will surely point out the potential drawbacks investors may face when getting their cash in ETFs like the one that just got approval from the U. S. Securities and Exchange Commission. USA
“They have the potential for a tracking error, additional transfer-related pricing and limits in terms of controlled assets that must be had to rebalance the fund after a safe size, which poses additional risk,” he said.
Possible increase in demand
The arrival of this new ETF could potentially lead to an increase in demand, several analysts noted.
Aguilar spoke of the proliferation of futures budgets like the one to be presented tomorrow, saying that even if they are spot ETFs, he still believes they will manage to attract really extensive investor flows.
Jack McDonald, chief executive of fintech company PolySign, also spoke.
“Overall, I think a Bitcoin ETF will generate more demand for Bitcoin than not having one, as it solves a lot of regulatory issues that many investors need an explanation about,” he said.
“That said, a spot ETF for Bitcoin would generate much more demand than a futures ETF for Bitcoin given the relative prices and fees related to the latter. “
Disclosure: I bitcoin, bitcoin cash, litecoin, ether, EOS and soil.
I am a publisher and monetary with a forged wisdom of asset markets and investment concepts. Currently, I am vice president of content for Quantum corporate monetary facilities.
I am a monetary and editor with a forged wisdom of asset markets and investment concepts. Currently, I am vice president of content for Quantum Economics corporate monetary facilities. I have worked for monetary establishments such as State Street, Moody’s Analytics and Citizens Commercial Banking. Author of more than 500 publications, my paintings have been published in media such as Fortune, Business Insider, Washington Post, CoinDesk and Investopedia. Previously, I created all courses in business finance for a corporation of more than three hundred people. I have spoken at industry events around the world and have delivered speeches on monetary literacy for Mensa and Boston Rotaract. Lately I own Bitcoin, Bitcoin Cash, Litecoin, Ether, EOS and Solana.