This past week was filled with excitement and the bitcoin bulls started a new stampede. On Wednesday bitcoin climbed to a new all-time high, reaching $66,930.39. The record price came a day after the first US. bitcoin exchange-traded fund (ETF) debuted on the New York Stock Exchange giving bitcoin a big boost. The fund already has over $1 billion in management and is the quickest ETF to reach that threshold. Trading under the ticker symbol BITO, the fund essentially allows people to bet on the future of bitcoin, without actually having to purchase the cryptocurrency on a crypto exchange. Since the start of October, bitcoin is up by 50% surpassing the market value of both Facebook and Tesla. Other leading cryptocurrencies mirrored bitcoin’s gains, most notably Ethereum (ether) and Solana (SOL), which were up more than 10% and the overall crypto market cap climbed above its previous all-time high, going over $2.6 trillion. The launch of a bitcoin ETF increases the cryptocurrency’s legitimacy, making it easier for investors to get exposure.
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Who would of imagined? To put this price in perspective, a year ago, bitcoin was less than $12,000, and this past week it has passed the $63,255 record it set in mid-April after its price fell as low as $30,000 in July. The new ETF is a landmark for the nascent crypto industry, which has been pushing for many years, for greater acceptance by Wall Street.
The bitcoin ETF brings convenience and access, removing custody from the puzzle. Bitcoin die-hards will argue that if you don’t hold your own private key, you don’t have real control. But lots of investors just want access to crypto returns, by buying a simple regulated asset from someone they trust. Giving people different options is always a good thing, as it creates more opportunities for the market to grow.
In two days of trading, the new ProShares bitcoin fund broke the record for the growth rate to $1 billion, which was held for 18 years. The ProShares bitcoin ETF is the first of several funds expected to follow. A second bitcoin ETF came days after the ProShares bitcoin ETF.
I guess when it rains it snows…
It took the SEC a decade to approve the first one and now within a week we have two. Valkyrie Investments’ bitcoin ETF started trading early Friday, under the BTF ticker symbol. The SEC’s approval of more bitcoin ETFs will trigger even more growth, and we’ll possibly see the crypto market grow 3x, to $7–8 trillion.
Bitcoin ETFs are a crucial catalyst for the development of cryptocurrencies, attracting new investors and expanding awareness and understanding of the technology. Institutional investors are already driving exchange volumes, and adoption will surge now that bitcoin exposure and access become easier.
The buying frenzy could lead Bitcoin to soar to higher levels, riding on the positive investor sentiments. For now, we can expect the bullish trend to continue with new all-time highs before the end for the year. Several analysts believe bitcoin is now on the second major leg of a bull run that will take it above $100,000 before the end of 2021. If history is any guide, the ETF industry has a way of solving the legal and regulatory complexities and bringing new assets into the fold.
We are moving towards decentralization and Web3 and crypto ETFs are an important stepping stone in the mass adoption of crypto. Crypto ETFs are laying the groundwork, letting people easily get into the market, as they learn more about safely owning, storing, and using crypto.
Back in April, Peter Thiel called bitcoin a “financial weapon from China“. Since then, China has banned everything crypto (mining, trading, etc). If bitcoin is a weapon, the Chinese don’t have it anymore. In September El Salvador made it a legal tender. In October, Jerome Powell from Federal Reserve said he is not going to ban cryptocurrencies. Now the SEC approved the first two bitcoin ETFs with more to come. Well, if bitcoin is a financial weapon, it seems like the US is putting it in their arsenal.
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