What Does the Bitcoin ETF Launch Mean?
So, the Bitcoin ETF launch happened in New York, and attracted a lot of attention. You've heard about it, but what does it mean?
The first futures-based Bitcoin Exchange Traded Fund (ETF) finally launched on the New York Stock Exchange amid a fanfare in what many are calling a watershed moment not just for Bitcoin but for the cryptocurrency industry as a whole.
After years of rejected applications and many a false dawn, the world’s first futures based Bitcoin ETF became available to investors yesterday.
The ‘ProShares Bitcoin Futures ETF’ will provide investors with exposure to Bitcoin without having to personally hold the asset themselves. Investment brokers will be able to purchase and trade shares in the fund which will give their customers exposure to the world’s premier cryptocurrency.
The sanction and launch of the latest financial product added legitimacy to Bitcoin and cryptocurrency with many people viewing the event as a watershed moment for the entire industry.
Whilst crypto industry milestones have historically led to massive sell-off’s many industry experts are expecting prices to soar to new all time highs as a professional and licenced ETF will provide a legitimate avenue for institutional capital to enter the industry.
Michael Spahir, CEO of ProShares told the New York Times that '2021 will be remembered for this milestone' as traditional investors want 'convenient access to Bitcoin in a wrapper that has market integrity'.
Only futures for now
While the ProShares ETF is a purely futures based product, meaning buyers can only trade contracts based on the speculation of the future price of Bitcoin, many experts agree that this is a step in the right direction for those institutional clients looking for Bitcoin exposure.
Michael Saylor, CEO of MicroStrategy, announced in September that “When we have a Bitcoin ETF in the US, billions and billions of dollars will flow into Bitcoin that under no circumstances would have found their way into Bitcoin otherwise”.
With a Bitcoin price of just over $63,000 the future remains to be seen but with market sentiment riding high many are expecting today’s milestone to be the catalyst the market has been waiting for.
Author: Mark Harridge
Mark Harridge first came across Bitcoin and began to use its peer-to-peer payment network in mid to late-2011. He quickly understood that this technology would change the world. Mark is passionate about crypto adoption, from a macro economic and institutional perspective, and the numerous factors that fuel the relentless march towards individual self sovereignty and the decentralised society of the future.