Category: Bitcoin Futures ETF

Bitcoin Futures ETF Exceeds Expectations, Trades $1 Billion On Day One

Bitcoin Futures ETF Exceeds Expectations, Trades $1 Billion On Day One

The numbers are in, and the Bitcoin Futures ETF had the biggest debut of the year. By far. We have to “exclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA,” but that’s fair. Apparently, the ProShares Bitcoin Strategy ETF got to the top naturally, via real trades by real people and institutions. Considering that just its approval by the SEC seemed to catapult Bitcoin’s price to the edge of an All-Time High, a question arises. How will the market react tomorrow? And the day after that?
Related Reading | Bitcoin ETF Check, What’s Next For BTC
But let’s avoid speculation and check Senior ETF Analyst for Bloomberg, Eric Balchunas’ charts:

If we don’t exclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA (not natural), it still ranks #2 overall. Here’s that list. The reason some of these shouldn’t be included IMO is they don’t really represent grassroots interest. pic.twitter.com/wmZiHnpFrS
— Eric Balchunas (@EricBalchunas) October 19, 2021

Considering the first-ever Bitcoin Futures ETF “also traded more than 99.5% of all ETFs,” it’s fair to say the launch was a huge success. What does it mean for the following ETFs? According to Balchunas, it’ll be hard for them to succeed. “Every day counts because once an ETF gets knows as ‘the one’ and has tons of liquidity, it’s virtually imposs to steal.” And, what does this mean for the market in general? NewsBTC already covered this question:
“Although these ETFs have attracted criticism for being backed by futures contracts and not the underlying asset, they could still have big implications for Bitcoin — allowing tax-sheltered and retirement accounts to easily get exposure, and potentially opening the cryptoasset to a much broader audience.”

The NYSE welcomes @ProSharesETF in celebration of the first U.S. Bitcoin-Linked ETF $BITO https://t.co/0qh0NDS2d4
— NYSE 🏛 (@NYSE) October 19, 2021

Why Is There A Bitcoin Futures ETF Instead Of A Bitcoin ETF?
Who better to answer this question than the SEC’s chairman himself, Gary Gensler told CNBC: 
“What you have here is a product that’s been overseen for four years by the U.S. federal regulator CFTC, and that’s being wrapped inside of something within our jurisdiction called the Investment Company Act of 1940, so we have some ability to bring it inside of investor protection.” 
So, the Bitcoin Futures ETF falls under the Commodity Futures Trading Commission jurisdiction. Plus, it tracks the Chicago Mercantile Exchange (CME) Bitcoin futures. And the SEC considers that the institutional support will protect the customer. According to them, the underlying asset, Bitcoin, is too volatile and subject to manipulation.
The first persons to propose a Bitcoin ETF in the USA, the Winklevoss twins, lament that when they did the price of Bitcoin was $68 and nowadays is $64K. “That’s almost a 1000x return in the meantime. I’m glad we got here, but it has taken too long.”

When @cameron and I first proposed a bitcoin ETF in July 2013, the price of bitcoin was $68.
Today, upon the launch of two bitcoin futures ETFs, the price of bitcoin is $64,000.
That’s almost a 1000x return in the meantime. I’m glad we got here, but it has taken too long.
— Tyler Winklevoss (@tyler) October 19, 2021

Also a skeptic of the Bitcoin Futures ETF‘s long term potential, Anthony Bertolino, VP of growth at iTrustCapital, told CNBC:
“The launch of the first bitcoin-linked ETF in the U.S. will bolster the broader crypto market and help an entirely new investor class experience the benefits of bitcoin as a legitimate asset. However, a derivatives-based bitcoin ETF is not where we want to be long-term.”

BTC price chart for 10/20/2021 on Forexcom | Source: BTC/USD on TradingView.com
What Are The ProShares Bitcoin Strategy ETF’s Characteristics?
The next few days will be crucial for this story. There’s a possibility that today’s demand was orchestrated, at least in part. If this happened, it’ll be very obvious in the following days. In any case, the fund’s official site defines the first Bitcoin Futures ETF as:
“ProShares Bitcoin Strategy ETF (BITO) is the first U.S. bitcoin-linked ETF offering investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way. The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts.”
Related Reading | Grayscale Investments Set to File for Bitcoin Spot ETF as Competition Heats Up
And alerts the clients that “The fund does not invest directly in bitcoin,” and that “The price and performance of bitcoin futures should be expected to differ from the current “spot” price of bitcoin.” Forewarned is forearmed.
Featured Image: Screenshot of the ETF’s opening bell ceremony| Charts by TradingView

Analysts predict Valkyrie will launch Bitcoin Futures ETF this week

Analysts predict Valkyrie will launch Bitcoin Futures ETF this week

Commentators are predicting that a second futures-based Bitcoin exchange-traded fund (ETF) will go live by the end of the week following the launch of ProShares’ Bitcoin Strategy ETF later today.On Oct. 19, Bloomberg’s analyst Eric Balchunas predicted that Valkyrie’s Bitcoin (BTC) futures-based ETF is “likely” to launch in the coming days after being certified for listing on the Nasdaq exchange last week. If true, the milestone would make Valkyrie’s fund only the second Bitcoin ETF to launch in the United States, with ProShares’ futures-based ETF slated to begin trading on the New York Stock Exchange under the ticker $BITO on Oct. 19.Fellow Bloomberg analyst James Seyffart had initially predicted that Valkyrie’s Bitcoin Strategy ETF ($BTF) would go live on the same day as ProShares’ product. However, Balchunas tweeted earlier today that Varlkyrie’s fund will “likely” launch on Oct. 20 or Oct. 21, adding that ProShares will have the “market to itself” for the time being.Update: Valkyrie not going live tomorrow. Likely looking to launch Wed or Thu tho, but we’ll see. Anyway, $BITO will have market to itself tomorrow. https://t.co/G2Ucit6yxM— Eric Balchunas (@EricBalchunas) October 18, 2021Balchunas also noted that Valkyrie had updated its ticker from BTFD to BTF in its application.Invesco bows out of race to launch futures-based Bitcoin ETFDespite the bullish sentiment surrounding the U.S. Securities and Exchange Commission (SEC) approving the United States’ first Bitcoin ETF, Invesco announced it had withdrawn its application for a futures-based ETF on Oct. 18.While onlookers had predicted Invesco’s futures ETF would receive a greenlight from the SEC this week, the firm revealed on Oct. 18 that it had withdrawn its application, adding its intentions to work toward launching a spot Bitcoin ETF in partnership with crypto broker-dealer Galaxy Digital. Invesco stated: “We have determined not to pursue the launch of a Bitcoin futures ETF in the immediate near-term; however we will continue to work in partnership with Galaxy Digital to offer investors a full shelf of products with exposure to this transformative asset class, including pursuing a physically-backed, digital asset ETF.”Related: SEC extends four Bitcoin ETF deadlines by 45 daysHowever, during an Oct. 19 episode of Anthony Pompliano’s “Best Business Show,” Seyffart and Balchunas argued that the approval of a spot BTC-backed ETF is unlikely to happen anytime soon.Balchunas asserted that SEC chairman Gary Gensler is much more “comfortable” with Bitcoin futures-based ETFs as they offer greater consumer protections than spot-backed funds.

Grayscale Confirms Plan to Convert GBTC Into Bitcoin ETF

Grayscale Confirms Plan to Convert GBTC Into Bitcoin ETF

Grayscale Investments has confirmed its plan to file for its bitcoin trust (GBTC) to be converted into a bitcoin exchange-traded fund (ETF). “The NYSE Arca will file a document called the 19b-4 to convert GBTC into an ETF,” said Grayscale’s official.
GBTC to Become Bitcoin ETF
Grayscale Investments has confirmed that it will convert its flagship product, Grayscale Bitcoin Trust (GBTC), into a bitcoin exchange-traded fund (ETF). Jennifer Rosenthal, Grayscale’s communications director, tweeted Monday:
Today, I’m happy to confirm that Grayscale will file for GBTC to be converted into an ETF as soon as there’s a clear, formal indication from the SEC.
She described: “Grayscale’s position has always been clear: we are 100% committed to converting GBTC — and our product family — into ETFs, when the SEC has formally expressed their requisite comfort with the underlying bitcoin market.”
The Grayscale communications director added that there are positive developments within the SEC, including the approval of a futures-based bitcoin ETF that is expected to start trading Tuesday. The bitcoin futures ETF from Proshares will trade under the ticker symbol “BITO” on the NYSE.
Rosenthal explained that this means:
Once there’s official and verifiable evidence of the SEC’s comfort with the underlying bitcoin market — likely in the form of a bitcoin futures ETF being deemed effective — the NYSE Arca will file a document called the 19b-4 to convert GBTC into an ETF.

The company’s total assets under management (AUM) is $53.5 billion as of Oct. 18, with GBTC holding about $39.77 billion.
Grayscale CEO Michael Sonnenshein told CNBC Monday:
There is a lot of excitement for regulators finally allowing a bitcoin anything onto a national securities exchange … When you look at the structure of a bitcoin futures product, there is going to be an impact to investors.
What do you think about Grayscale converting GBTC into a bitcoin ETF? Let us know in the comments section below.

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New tickers and ARK filing shows Bitcoin futures ETF approval imminent: Analyst

New tickers and ARK filing shows Bitcoin futures ETF approval imminent: Analyst

Bloomberg’s senior ETF analyst says there are “good” signs that a Bitcoin ETF will soon be approved, pointing to Ark Invest filing for a Bitcoin futures ETF with an assigned ticker and Valkyrie updating its own ETF prospectus with a ticker. Cathie Wood’s Ark Investment Management LLC filed for a Bitcoin (BTC) futures ETF under the ARKA ticker, while Valkyrie has assigned its BTC futures prospectus with the BTF ticker. According to Bloomberg analyst Eric Balchunas, firms typically update their proposals when they have everything set and “ready for launch,” suggesting that Valkyrie may soon be given the green light by the U.S. Securities and Exchange Commission (SEC).Balchunas also pointed to Ark Invests’ Bitcoin futures ETF application on Oct. 13 in partnership with 21Shares and whiteAlpha Architect white label, noting that the assigned ARKA ticker was “another good sign” that the SEC was set to give a tick. People keep asking me what I’m looking for first to confirm SEC approval and it is these type of updated prospectus filings. That’s what happens right bf a launch, they fill in all the XXs and add ticker. That said, this is bitcoin so WTF knows for sure lol.— Eric Balchunas (@EricBalchunas) October 13, 2021Referring to Valkyrie’s ETF, the analyst added that he looks for “these type” of updated prospectus filings when determining whether an official SEC greenlight is incoming, and said that applicants often update the final details “right before” launch. He conceded that with the crypto sector, nothing is certain however.Permabear Mr Whale downplayed the significance of the Ark Invest news saying all Ark did was update its “ARKW ETF prospectus” to say that it may gain exposure to BTC via exchange-traded funds in Canada. However Ark’s latest ETF filing with the SEC has no mention of the word “Canada” and the application clearly outlines that the fund is seeking to invest in “exchange-traded Bitcoin futures contracts that are cash-settled in U.S. dollars” on the Chicago Mercantile Exchange (CME). ALSO notable, this is the second straight filing to not have the word “Canada” in it. It ONLY invests in futures no BTCC or GBTC options. Rumor is SEC no like that and wants them to be strictly futures. pic.twitter.com/l8KTxFtWH8— Eric Balchunas (@EricBalchunas) October 13, 2021

The price of BTC has surged 28% since the start of October to sit at around $57,500 at the time of writing. Many onlookers have attributed the recent pump to expectations that the SEC will soon approve a futures-based Bitcoin ETF. Related: SEC Chair Gary Gensler actually is pro-Bitcoin, Volt Equity CEO arguesBalchunas stated earlier this month that Bitcoin futures-backed ETFs have a high chance of being approved in October. He argued that they are regulated under the “40 Act” which is favored by the SEC as it offers greater consumer protections than physically-backed Bitcoin ETFs regulated under the “33 Act.”“Yes, the SEC has kicked can on Bitcoin ETF approval BUT that is for the physically-backed ones under ’33 Act,” he said and added: “The futures ETFs filed under the ’40 Act (which Genz loves) are very much alive and likely on schedule (we think 75% chance approved in Oct).”Opinions vary however and Todd Rosenbluth, senior director of ETFs and mutual fund research at research firm CFRA argued this week he believes that approval of a BTC futures ETF may be delayed until 2022. Speaking on CNBC’s ETF Edge, Rosenbluth stated that the current clouded regulatory landscape could cause further delays and that the SEC could be waiting to approve all the ETFs simultaneously to avoid a “first-mover advantage.”“It’s possible — in fact, we think it’s likely — that we’re going to see a delay of a Bitcoin futures ETF until 2022 until the regulatory environment is more clear,” he said.

Will The SEC Approve A Bitcoin Futures ETF In 2021? Here Are The Implications

Will The SEC Approve A Bitcoin Futures ETF In 2021? Here Are The Implications

Rumors are flying. The SEC could approve a Bitcoin Futures ETF before the year ends. It seems like the US Security And Exchange Commission will not give the go-ahead to the mythical Bitcoin ETF just yet… or ever, but a new option has a few companies salivating. What does this mean? And why a Bitcoin Futures ETF before one for the asset itself? That’s what we’re here to explore.
Related Reading | Skybridge Capital Applies For Cryptocurrency ETF And Accumulates $100 Million For ALGO Fund
But first, why is the SEC hesitant about approving the Bitcoin ETF? Investopedia responds:
“The reason is that bitcoin, the largest cryptocurrency in the world by market capitalization, remains largely unregulated. Additionally, the Securities and Exchange Commission (SEC) is hesitant to allow an ETF focused on the new and largely untested cryptocurrency market to make its way to the public.”
If that’s true, what makes us think that a Bitcoin Futures ETF is not only possible, but imminent? Well, last month The SEC Chairman Gary Gensler told the Aspen Security Forum:
“I anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act). When combined with the other federal securities laws, the ’40 Act provides significant investor protections.
Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”

🤯 pic.twitter.com/XUlSV31jEw
— Eduardo Prospero (@edprospero23) September 23, 2021

Is A Bitcoin Futures ETF What US Investors Want?
Since Gary Gensler sent such a clear signal, the financial world responded in unison. 
“At least four asset managers have filed for ETFs that invest in bitcoin futures after Securities and Exchange Commission chair Gary Gensler earlier this month indicated that he could approve such funds. But investors may not want them in lieu of physically backed bitcoin ETFs, analysts have said.”
According to Investopedia, “A bitcoin ETF mimics the price of the digital currency, allowing investors to buy into the ETF without trading bitcoin itself.” However, who’s interested in ETFs when bitcoin, the asset, is widely available? Some investors or groups simply can’t invest in bitcoin because their own internal rules won’t allow them to. They can’t purchase bitcoin through a brokerage account. No financial institution backs it, so no one protects them. And, of course, there’s the feared volatility.
Bloomberg explains how Bitcoin fixes this:
“A Bitcoin ETF could help get around those restrictions since the format is more widely accepted. “There are all sorts of custody and regulatory hurdles for big financial institutions to jump through,” said Ross Mayfield, investment strategy analyst at Robert W. Baird & Co. “If it were offered in an ETF, it clears a lot of that up for financial institutions.”
However, it appears that the SEC won’t approve one any time soon. Why would they approve a Bitcoin Futures ETF instead? Bloomberg continues:
“For the SEC’s purposes, Bitcoin futures also offer an additional level of security because they are governed by the Chicago Mercantile Exchange and require investors to put down cash on margin to trade, as a form of collateral.”

BTC price chart 09/27/2021 on Coinbase | Source: BTC/USD on TradingView.com
Experts And Important Players Disagree
While some companies can’t wait for the Bitcoin Futures ETF to be available, others are less enthusiastic. One of those is Michael Sonnenshein, CEO of Grayscale Investments. His company is one of the many that applied for a Bitcoin ETF and are still waiting for approval. In a recent CNBC interview, he said:
“It would be shortsighted of the SEC to allow a futures-based product into the market before a spot product,” Sonnenshein told CNBC’s “Squawk Box” on Tuesday. “They really should be allowing both products into the market at the same time and let investors choose which way they want.” 
Related Reading | Did The SEC’s Gary Gensler Threaten Crypto And DeFi In The WaPo Interview?
Of course, he’s heavily invested in this outcome. His company’s Grayscale Bitcoin Trust is incredibly successful, but if they manage to turn it into an ETF, it might go parabolic. However, he’s not the only one that thinks that way. In the Bloomberg article, another expert elaborated on the Bitcoin Futures ETF ‘s limitations:
“With futures-based products, you introduced additional cost, more complexity, you have futures contracts that have to be rolled,” said the ETF store’s Geraci. “It’s just a sub-optimal option for investors.”
In any case, the Bitcoin Futures ETF approval is just speculation. Gary Gensler said he looked forward to reading his staff’s review of the fillings, which is not a guarantee by any stretch of the imagination.
Featured Image by Markus Winkler from Pixabay – Charts by TradingView

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