Friday, October 16 saw the approval of a bitcoin exchange-traded fund (ETF), marking it the first regulated cryptocurrency investment vehicle in the U.S. to go mainstream.
ProShares is likely the company that will start trading on Monday at the NYSE with the ProShares Bitcoin Strategy ETF, with its listing is on the NYSE under the ticker BITO confirmed for October 28, 2021.
Investors will now have access to bitcoin by investing in a fund that tracks bitcoin futures, rather than bitcoin directly. Bitcoin futures have long been spoken of by SEC chair Gary Gensler as a regulated alternative to a bitcoin exchange-traded fund. Gensler favors the futures route, as regulation protects investors. ETFs allow investors to diversify their portfolios without owning the assets themselves. A bitcoin exchange-traded fund tracks the price of bitcoin directly, but according to Gensler is susceptible to price manipulation, leaving investors exposed. Grayscale, a fully regulated company, already has products that offer exposure to bitcoin directly, but they are not available to retail investors.
Over 30 ETF applications still on SEC’s desk
The SEC has flat-out rejected filings for bitcoin ETFs, and 30 applications are awaiting approval. It must be noted, however, that the SEC does not need to approve one. Federal law just allows the SEC to make a filing effective. The Winklevoss Twins, Cameron and Tyler, who founded the Gemini exchange, first filed for a bitcoin ETF in 2013. The approval of a bitcoin exchange-traded fund that tracks futures is a step toward bridging the gap between traditional finance and cryptocurrency. ETFStore president Nate Geraci is drawing encouragement from the approval, as he says it will bring bitcoin exposure to the mainstream, and “facilitate greater education across the space.
Futures fund approval could open the floodgates
The bitcoin price crossed the $61000 mark on Friday, in anticipation of the ETF approval.
The SEC still has the prerogative to object to the commencement of trading ProShares. VanEck, Valkyrie Investments, WisdomTree, Skybridge, Fidelity, Kryptoin, Galaxy Digital, Ark Invest, and New York Digital Investment Group are among the high-profile applicants for a bitcoin ETF so far and could be listed fairly quickly after the ProShares listing.
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