The first ETF was listed on the New York Stock Exchange.
Bitcoin's upward momentum continues. This behavior of the main cryptocurrency is explained by the fact that the US Securities and Exchange Commission has received several ETF applications and has already managed to approve some of them. The world's first trading in shares of the fund, which is completely based on bitcoin, started Wednesday. The shares became available on the New York Stock Exchange under the BITO ticket. The fund itself is called the Bitcoin Strategy ETF, and it was launched on behalf of ProShares.
For the cryptocurrency market, this is a small victory, as many other companies have been trying to get permission from SEC to launch exchange-traded bitcoin funds since 2013. Thus, it is now even easier for institutional investors to buy bitcoin and stocks of companies and funds associated with it.
Now large investors can buy not just bitcoin itself, but also various investment instruments derived from it. ETF is an investment fund that forms a portfolio of assets from cryptocurrencies. And each security of such a fund is tied to a part of the fund's assets. That is, ETFs actually allow you to buy cryptocurrency without directly owning it. In the case of ProShares, its shares will be pegged to Bitcoin futures, which are traded on the Chicago Mercantile Exchange.
According to experts in the field of investment and cryptocurrency, now any investors and traders will have access to bitcoin purchases through a regular brokerage account. They will not need to go out on their own to exchanges, transfer bitcoins to their wallets and store them.
Why ETFs are attractive to investors?
Experts point out that ETFs are another cryptocurrency market tool that allows you to invest from a different angle than buying cryptocurrencies directly. The more such tools there are, the better the US cryptocurrency market develops, which is especially important against the backdrop of a complete ban on cryptocurrencies in China.
According to many experts, ETFs will cause a significant influx of new investors in the cryptocurrency market. However, the problem in 2021 is still that many investors who would like to invest in cryptocurrencies have a low level of awareness of this area. In addition, the crypto industry is still very weakly regulated by law. Investing in bitcoin, albeit indirectly, through an ETA fund is a safer operation compared to buying a classic bitcoin. Also, the threshold for entering it is much lower. The price of one share at the beginning of Wednesday's trading was only $40, and anyone with a brokerage account could buy it. Thus, not only for institutional investors, the process of buying cryptocurrencies was greatly facilitated, but also for small investors.
Experts note that the SEC's permission to list shares of a bitcoin fund means that bitcoin itself is recognized by the regulator, which is perhaps the most important. Bitcoin fund shares will be less volatile, which will significantly increase interest among investors. And, of course, the chances of getting on the network to scammers are much less than with the usual purchase of bitcoin through exchanges and storing it in your wallet.
Thus, Bitcoin currently has an excellent foothold for further growth. Let me remind you that in the past few days, several forecasts have been made at once, according to which Bitcoin will grow to $100,000 in 2021-2022. However, I will also remind you that next year there is a high probability of a new bearish trend formation. Bitcoin still cannot grow constantly, but at the moment its growth has been going on for a year and a half.
