Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), could announce today, October 18, the official approval of the first Bitcoin futures ETF in the country, presented by ProShares.
The U.S. Securities and Exchange Commission (SEC) gave the green light to the country's first Bitcoin futures ETF last Friday. The financial regulator published an amended post-effective prospectus on the Bitcoin ETF (exchange-traded fund), filed by the firm ProShares in August. According to the SEC, the company has approved the Bitcoin ETF (exchange-traded fund) in August. publication, ProShares' prospectus goes into effect today, Monday, October 18, making official the approval of the first Bitcoin ETF in the United States.
The New York Stock Exchange, NYSE Arca, confirmed the approval of the ETF to begin trading on the market, so it is very likely that the ProShares ETF will begin trading this week.
The firm's ETF, called ProShares Bitcoin Strategy ETF, is an investment fund that will track Bitcoin futures, rather than the price of the cryptocurrency directly.
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The SEC and Bitcoin ETFs
The SEC has previously stated that its mission is to ensure the security and stability of investors, especially retail investors, so a cryptocurrency futures ETF will help mitigate the risks of volatility and price manipulation. BTC in the markets. By tracking Bitcoin futures, investors will trade the digital asset based on BTC futures contracts traded on derivatives exchanges, such as CME, where a fixed price of the cryptocurrency is set at a certain time frame. In addition, this stock-based investment instrument was introduced under the Investment Company Act of 1940, which Gary Gensler, chairman of the SEC, highlighted as offering protection to investors.
The approval of a Bitcoin futures ETF began to gain traction in August of this year, when Gensler pointed out that it was a feasible product because it allowed investment in the cryptocurrency, without owning it directly. CoinDesk analysts noted on Friday that the 5 SEC commissioners were in favor of the approval and creation of this first Bitcoin ETF in the United States.
Earlier this month, the SEC chairman also approved an ETF submitted by Volt Equity, which focuses on stocks of companies that are part of the “Bitcoin Industry Revolution.”
Victory for the crypto community
Bloomberg Intelligence analyst James Seyffart said on Twitter that the ProShares ETF will trade under the ticker BITO and consist of 95 basis points, noting that its trading fee will be 2% below that of Grayscale's Bitcoin investment fund, GBTC.
Seyffart also noted that Bitcoin ETFs filed by investment firms Valkyrie Investments and Invesco LTD are likely to be approved by the financial regulator and begin trading in the coming days. Regarding Valkyrie Investments, the Bloomberg analyst said that the firm has already filed Form 8A with the SEC, which is filed just before launching products on the exchange. In addition, the Nasdaq has already approved Valkyrie’s Bitcoin ETF.
The ETF proposals submitted by these firms are also based on Bitcoin futures, like the one from ProShares and were filed under the Investment Company Act of 1940.
Bitcoin grows 12% in the last week
Bitcoin price has grown by 12,7% over the past 7 days, driven by market optimism over the possible approval of the first BTC futures ETF by the SEC. BTC, the market-leading and most important cryptocurrency worldwide, surpassed the $60.000 level on Friday, with a bullish momentum that took it to $XNUMX. $62.910.
Source: CoinGecko
This is the first time in 6 months that the Bitcoin price has surpassed $60K, moving even closer to its all-time high of $64.804 per BTC seen on April 14, according to data from CoinGecko. Open interest in Bitcoin futures also grew exponentially, surpassing $XNUMXK. 17.580 million at the close of this edition.
Analysts are predicting that the price of the cryptocurrency will continue to grow and reach new all-time highs once the approval of the ProShares ETF and that of other firms is made official. In fact, many are betting that the price of Bitcoin will break $100.000 per BTC this year.
On the other hand, Mikkel Morch, director of risk firm ARK36, has a different perception on the future price of Bitcoin after the approval of the first cryptocurrency ETF in the United States. According to Morch, the price of BTC is likely not to start a strong rise as traders expect, but rather to fall by up to 20% after the approval of the ETF. Likewise, other analysts such as former Goldman Sachs executive Raoul Pal, considering that investors prefer to own the digital asset directly, so a Bitcoin futures ETF may not be as in-demand as some expect.
Pal also believes that these instruments can benefit professional intermediaries and investors with extensive experience in derivatives markets and harm retail investors.
However, Bloomberg analyst Eric Balchunas believes Bitcoin futures ETFs could be highly successful as trading tools rather than long-term holding instruments. On Twitter, Balchunas noted that it is not unreasonable to assume that these financial instruments could gain more than $12 billion in value over the next 4.000 months.
Bitcoin in the United States
As Bit2Me News recently reported, the deadline for the financial regulator to rule on Bitcoin ETFs filed by VanEck, WisdomTree Investments, and others is also approaching. Cryptocurrency research and analytics firm Arcane Research, a subsidiary of investment firm Arcane Crypto, said earlier this month that the SEC is looking at a total of 12 Bitcoin-focused ETFs.
The demand for this cryptocurrency in the United States has grown exponentially in the last year, to the point that Chainalysis positions the North American country as the 8th in the list of the countries with the highest adoption of cryptocurrencies this year.
On the other hand, countries such as Canada and Brazil have already approved several Bitcoin exchange-traded funds this year, allowing investors to gain direct exposure to the cryptocurrency. Purpose's Bitcoin ETF in Canada had a record growth in its first 2 months, surpassing $1.000 billion in this period. In Europe, the European Union has also given the green light to several ETFs for this cryptocurrency, such as that of Melanion Capital, approved this year under the EU UCITS rules.
Barring a last-minute setback today, which is highly unlikely to happen, the ProShares ETF is the first approved Bitcoin exchange-traded fund in the United States. This is undoubtedly a victory for the crypto community, which has been seeking approval for an exchange-traded investment vehicle for Bitcoin since the first application was filed in 2013. However, the SEC is still waiting for approval of a Bitcoin spot ETF.
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