Love cryptocurrencies or hate the very idea of them, they’re becoming more mainstream by the day.
Cryptocurrencies have surged so much that their total value has reached nearly $2.5 trillion, rivalling the world’s most valuable company, Apple, and have amassed more than 200 million users. At this size, it’s simply too big for the financial establishment to ignore.
Today, ProShares became the first Bitcoin-focused exchange-traded fund (ETF) to trade on the NYSE, after the US Securities & Exchange Commission failed to block its registration on the world’s largest stock exchange by market capitalisation. Proshares Bitcoin ETF, which hold Bitcoin futures, saw 24.2m trades today.
Bitcoin has come a long way since someone or a group of someones under the name Satoshi Nakamoto wrote a paper in 2008 about how to harness computing power around the world to create a digital currency that can’t be double-spent. The price has more than doubled this year alone to roughly $62,000. It was at only $635 five years ago.
The Bitcoin ETF
The launch is a historic one for the crypto space; BITO is the first cryptocurrency-related ETF to be approved by the SEC after nearly a decade of effort by various issuers. Previous ETFs have all focused on the crypto markets as a whole, but BITO invests in the arena of cryptocurrency solely via the futures market.
ProShares launched a similar bitcoin futures-based mutual fund in July of this year, the Bitcoin Strategy ProFund (BTCFX). Thus far, BTCFX has had a bitcoin reference rate that was up 51% while the mutual fund itself was up 52%. The fund incurs costs when moving from one completed contract to the next, called the “roll” in futures space; in the month of September, it was twenty basis points, which is 2.5% annualized, a cost that is much less than any other type of bitcoin exposure.
Bitcoin rose steadily throughout the day, trading over $63,000 to $63,676 as of 5:00 pm EDT, according to Coinmarketcap. Bitcoin’s all-time high is just over $64,800.
