Price Surge Fueled by ETF Expectations May Have Peaked
May Coinbase Listing and 2017 CME Bitcoin Futures Launch Followed by Decline
Long-Term Investment Attraction Also Seen as Limited
[Asia Economy New York=Correspondent Baek Jong-min] The first US-listed exchange-traded fund (ETF) investing in Bitcoin futures will begin trading on the New York Stock Exchange on the 19th (local time). Attention is focused on whether the Bitcoin price, which soared on expectations of the Bitcoin futures investment ETF listing, will rise further.
ProShares, a US ETF management company, announced on the 18th that its Bitcoin futures-tracking ETF will be traded under the ticker symbol 'BITO' starting the next day. The company's announcement is interpreted as the US Securities and Exchange Commission (SEC) having approved this ETF.
Michael Sapir, CEO of ProShares, said, "I believe many investors have eagerly awaited the launch of a Bitcoin-linked ETF," adding, "BITO will open the door to Bitcoin investment for investors who have brokerage accounts and are familiar with trading stocks and ETFs but have been reluctant to invest directly in cryptocurrencies."
The ETF product BITO can be bought and sold like stocks. This opens a way to invest in Bitcoin like stocks without needing an account on a cryptocurrency exchange or a cryptocurrency wallet. ProShares emphasized that there is no risk of exposure to security incidents.
ProShares expects that through BITO, which does not invest directly in Bitcoin spot, investors will conveniently gain opportunities to generate profits through Bitcoin.
So, how will the Bitcoin price move in the future? CNBC evaluated the start of trading of the Bitcoin futures ETF as a significant milestone for the still early-stage cryptocurrency industry, but Bitcoin has experienced sharp declines after rising ahead of historic events.
Bitcoin fell after peaking with Coinbase's Nasdaq listing in May and the Chicago Mercantile Exchange (CME)'s Bitcoin futures listing in 2017, respectively.
The US internet media Quartz reported, based on past experience, that although Bitcoin surged, there is a possibility of a decline.
Additionally, it was assessed that it is uncertain whether investors will invest heavily in Bitcoin futures ETFs instead of Bitcoin spot.
Robinhood users can buy Bitcoin without fees. On the other hand, BITO bears a 0.75% management fee. Of course, BITO's fee is still low compared to other cryptocurrency exchanges.
Quartz predicted that since BITO must bear costs to roll over futures contracts at each Bitcoin futures expiration, short-term investors will mainly buy rather than long-term investors.
According to CoinMarketCap, on this day, the Bitcoin price was trading at $61,970, up 1.43% compared to 24 hours earlier, attempting to break through $62,000 again.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
