ProShares will launch the first Bitcoin futures ETF in the United States on Tuesday (19th), setting a milestone in the cryptocurrency industry. Other cryptocurrency-related ETFs may also be launched soon. The price of Bitcoin (BTC) was inspired by this news to soar by 5.5. %
ProShares CEO Michael Sapir said in an interview that he plans to launch the first Bitcoin futures ETF on the New York Stock Exchange on Tuesday.
Karan Sood, CEO and Managing Director of Cboe Vest, a financial advisory platform, said that this ETF not only disrupts the current cryptocurrency market, but also excites investors.
Bitcoin once rose to US$61,799 on Monday, breaking away from the decline on Saturday and Sunday, and moving towards the historical record of nearly US$65,000 in mid-April. Cryptocurrency exchange Coinbase (COIN-US) and mining company Riot Blockchain (RIOT-US) each rose 4.54% and 7.00% on the day.
Although the Bitcoin futures ETF is not an ETF that investors imagine that can directly invest in digital currencies, it at least provides another option for investing in Bitcoin. U.S. companies are currently seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch Bitcoin ETFs.
ProShares ETF provides Bitcoin futures contracts, not Bitcoin itself. Buyers and sellers sign a contract and agree to deliver a specified amount of spot according to a specified time, price and other trading conditions.
Sood said that although the Bitcoin futures ETF may have a very high correlation with Bitcoin, these assets will not reflect the value of the currency because the ETF tracks the price of future contracts.
In addition, the cost of owning a fund is higher than that of individual assets, but Sood said that compared to managing cryptocurrencies by themselves, some investors are more willing to pay higher prices for the “institutional liquidity, custody, and execution” of ETFs.
Some advisers believe that digital currency is a speculative asset, and said that the price of futures contracts is difficult to predict, betting on this type of ETF will face considerable risks.
Jordan Benold of Benold Financial Planning stated that the volatility of bitcoin futures contracts is a gamble, and the bet is particularly high. It is hoped that investors can bear this ultimate risk.
Anthony Watson, founder and president of Thrive Retirement Specialists, said that the value of Bitcoin comes from an unstable and unpredictable group of market participants. However, when investors’ retirement savings and other goals are on the right track and they have spare money on hand, General financial advisors will not block people from investing, but suggest that it is best to invest only on a very small scale and test the water temperature.
