Bitcoin rallied to a record high a day after a Bitcoin exchange traded fund launched on Wall Street for the first time garnering strong demand in a sign of becoming investor interest in the asset class. The digital coin struck a high of 67.016 dollar, surpassing its April peak, following the debut of the Proshares Bitcoin strategy ETF on the New York Stock Exchange.
The launch of the Bitcoin Futures ETF in our opinion marked an important milestone for the crypto industry and will have – overtime – a lasting impact on cryptocurrency exchanges as current trading volumes will diversify. Therefore, we see the bitcoin ETF launch as an undeniably positive step for the entire crypto industry and the market seems to agree.
The approval of the ProShares ETF, which holds futures tracking the price of bitcoin, opened in our opinion the floodgates to other things. Investment manager Van Eck already applied for a futures-based fund while Grayscale, the largest digital asset manager with 38 billion dollars of bitcoin under management, filed to convert its holdings into an ETF backed by outright holdings of digital tokens. Therefore, markets cheered the launch and subsequent applications because the new vehicles could – and in our opinion will – draw in more investors, as they allow for a much broader reach for the crypto currency as ETFs are regulated assets. Now financial advisors can more easily add crypto asset exposure to client portfolios. Since the start of the year, Bitcoin prices have gained 130 percent in choppy trading, during which we saw the digital token hit record highs in the first quarter before collapsing to about 28,000 dollars in June. Some of the pullbacks in the summer was in our opinion down to fears about more stringent regulators.
Cryptocurrency markets have grown significantly since March last year to reach 2 trillion dollars in value, partly driven by professional investors jumping into the industry.
The decision by the US Securities and Exchange Commission not to block the ProShares fund is in our opinion also a sign the big global regulators are becoming more comfortable with crypto-backed products, even if they remain cautious on the industry more widely.
But in a sign of robust demand for crypto products, the ProShares fund traded more than 24 million shares on a single day and closed with assets of 570 million dollars, making it the second-most heavily traded new ETF on record.
That sounds promising in our opinion for more to come…