Second strongest start of all time: Bitcoin ETF Bito takes off
Crypto euphoria in the US. After multiple veto by the US stock exchange regulator, the first Bitcoin index fund (ETF) was finally able to start on the New York Stock Exchange today. That made a brilliant start to trading.
On Tuesday, the first Bitcoin-linked ETF was launched in New York, on the world’s largest stock exchange. The US Securities and Exchange Commission had repeatedly prevented the ETF from being issued. This time, however, she did not veto.
In the first 20 minutes after the start of trading, the Bito had turned over shares worth 280 million US dollars, as Bloomberg expert Eric Balchunas tweeted. The index fund thus made it into the top 15 strongest trading starts of all time. Balchunas sees the fund on its way to a top spot with a billion dollar trading volume.
The fund with the ticker name Bito is intended to enable investors to benefit from the price development of Bitcoin without having to invest directly in the cryptocurrency. Accordingly, technical knowledge or general crypto experience is not absolutely necessary – albeit always useful.
Accordingly, the provider Proshares positions the fund as an investment for investors who do not “open an account with a crypto exchange or who want to learn how to store their cryptocurrencies themselves”. In fact, this is not necessary because the fund is not directly linked to the Bitcoin.
He does not invest directly in the cryptocurrency, but only in Bitcoin futures. An investor undertakes to buy a specific product at a specific price at a specific time. In this way, investors invest in approximate values that can change due to investor behavior – regardless of the Bitcoin price itself. Although the futures are likely to approach the Bitcoin price, this is not mandatory. In any case, the ETF will be exposed to fluctuations of its own, which may or may not correlate with those of Bitcoin.
Several other providers are in the US with their Bitcoin ETFs in the starting blocks, including Valkyrie, Van Eck and star investor Cathie Wood. She is working on her own product together with the Swiss company 21Shares AG and the ETF provider Alpha Architect. The most promising candidate, Invesco, should also have made his stock market debut this week, but withdrew his application for approval.
In the United States’ crypto industry, the approval of the first Bitcoin ETF is seen as a breakthrough in establishing crypto products as an asset class in the mainstream. In fact, this could mean that crypto products could reach a much broader target group and thus end their niche existence.
While some analysts are already waiting for the next fireworks display of Bitcoin, others see only moderate increases in the environment of the ETF start. They believe that the approval that has now taken place has been foreseeable for a long time and has accordingly already been priced into the current increases. However, it can be considered certain that a strong inflow of funds into the Bitcoin environment is likely to increase demand and thus prices in the medium term.
A crypto ETF does not yet exist in Germany. The reason is the applicable law. A Bitcoin ETF would not be approved in this country because index funds cannot be launched with just one single asset – in this case Bitcoin.
However, German investors can invest in so-called ETPs (Exchange Traded Products) and ETNs (Exchange Traded Notes), which also map the prices of Bitcoin and other cryptocurrencies. They are traded on the Deutsche Börse and the Stuttgart Stock Exchange, for example, but with fees of up to 2.5 percent more expensive than direct trading via crypto exchanges.
