The first exchange-traded fund associated with Bitcoin debuted on Wall Street.
An exchange-traded fund (ETF) is a representative basket of shares that allows investors to hold multiple assets in an indexed form. On Tuesday, the ProShares Bitcoin Strategy ETF — with the ticker “BITO” — rose by 4.1% to a price of $41.65.
The Wall Street Journal explains:
So far, roughly 21.4 million shares of the ETF changed hands worth more than $890 million, making it one of the most highly traded fund debuts ever.
The launch is being closely watched on Wall Street, where finding a way to sell securities linked to bitcoin has been a priority for many firms… ProShares rang the bell at the New York Stock Exchange Tuesday to celebrate the launch of its ETF, which goes by the ticker BITO and holds bitcoin futures contracts rather than the cryptocurrency.
“There are a multitude of investors who have brokerage accounts and are comfortable buying stocks and ETFs,” said ProShares chief executive Michael Sapir. “We think this will appeal to them.”
As explained by The Daily Wire’s Ian Haworth, Bitcoin is a form of money that exists only in virtual form. Using digital “wallets,” individuals can send and receive cryptocurrencies in much the same way that people exchange currencies in physical or electronic form via traditional banking.
Unlike government-backed currencies such as the dollar, however, Bitcoin is entirely decentralized; its value is not managed by a central bank like the Federal Reserve.
As ProShares’ ETF debuted, the price of Bitcoin rose over 4% to $64,206.51 — placing it within 1% of its all-time high of $64,899.
Other investors are also interested in launching Bitcoin-related assets. Over the summer, Ark Invest chief executive Cathie Wood — who is known for capturing value through innovative companies and sectors — filed with the Securities and Exchange Commission to create the ARK 21Shares Bitcoin ETF, which would be a basket of cryptocurrency startups such as Binance, Bitstamp, Coinbase, Gemini, Kraken, KuCoin, and Poloniex.
Lawmakers, however, are already attempting to regulate the nascent cryptocurrency ecosystem.
Days after Wood’s filing, Sen. Elizabeth Warren (D-MA) told Treasury Secretary Janet Yellen — who is also chair of the Financial Stability Oversight Council — that the rising popularity of digital assets demands federal oversight.
“I have become increasingly concerned about the dangers cryptocurrencies pose to investors, consumers, and the environment in the absence of sufficient regulation in the United States,” read her letter. “However, as the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, the Council must determine whether these trends raise concerns beyond investor and consumer protection and extend to broader systemic vulnerabilities that could threaten financial stability.”
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Source: Dailywire
