[Bitcoin Now] Slight Rise to 73 Million Won Range... Post-ETF Boom 'Quiet'

Investment Heat Cools Down as Selling Pressure Emerges

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin slightly rose to the 73 million KRW range. The cryptocurrency market appears to have somewhat stalled due to the lack of significant positive factors following the recent launch of Bitcoin futures exchange-traded funds (ETFs) in the U.S. stock market.

According to the domestic cryptocurrency exchange Upbit, as of 6:13 PM on the 28th, Bitcoin recorded 73.37 million KRW, up 2.12% compared to the previous day. It had dropped to 70.18 million KRW the day before but rebounded slightly.

However, no new positive factors following the Bitcoin futures ETF have been mentioned. On the 19th (local time), the ProShares Bitcoin Strategy ETF, a Bitcoin futures ETF by asset management firm ProShares, began trading on the New York Stock Exchange (NYSE). Following the ETF launch, Bitcoin surged to as high as 81.75 million KRW.

In reality, as the enthusiasm cooled, speculative selling has appeared. According to cryptocurrency specialized media CoinDesk on the 27th, the estimated leverage ratio for Bitcoin is 0.19, the highest since November last year. A higher estimated leverage ratio means more investors are taking profits, which increases the likelihood of greater volatility.

There are also doubts about the sustainability of Bitcoin futures ETFs. According to U.S. economic media CNBC on the 27th, asset management firms such as ProShares and Valkyrie charge an annual management fee of 0.95% for their Bitcoin futures ETFs. This is higher than the average U.S. ETF management fee of around 0.7%. CNBC pointed out that if investors pay high fees for decades, they will lose fees, corresponding returns, and compound interest.

Experts also argue that Bitcoin futures ETFs reduce investment efficiency. Charlie Fitzgerald, an international financial planner at investment advisory firm Muasang Fitzgerald Tamayo, said, “When deciding to invest in mutual funds or ETFs for 1 year, 5 years, 10 years, or longer, a fee of around 1% is a significant burden.” Ivory Johnson, founder of asset management firm Dilancy Wealth Management, also explained, “It is better to buy Bitcoin directly than to invest in Bitcoin futures ETFs.”