On October 20th, Bitcoin reached a new milestone, surpassing $66,000, its highest level since its creation in 2009, after months of fluctuations. A further step towards its democratisation.

This latest surge coincides with the much anticipated first Bitcoin ETF debuting on the New York Stock Exchange last week. While Bitcoin’s price dropped back after setting the new high price point, the new record is an impressive feat considering just a year ago the currency hovered around $11,500 per coin.

Investors are hoping that new funds will be able to enter the cryptocurrency market using this new regulated financial product. The first trading session seems to have been a success, as the ETF saw 24.4 million trades and finished significantly higher.

ProShares, an American provider of specialized exchange-traded products (ETPs), launched  the country’s first exchange-traded fund linked to Bitcoin.

It’s the latest milestone for Bitcoin and for the ETF industry in general, explains Time. In a statement, ProShares CEO Michael Sapir, compared the launch of a crypto-linked ETF to the 1993 launch of the first stocks ETF and the 2002 rollout of the initial bond ETF. The U.S. market for ETFs has grown to more than $5.4 trillion and they’re owned by roughly 9% of all the nation’s households, according to the Investment Company Institute.

According to Time, cryptocurrencies, meanwhile, have exploded into a nearly $2.5 trillion industry after the creation of thousands of digital currencies. Bitcoin is the biggest of them all, with a total value of nearly $1.2 trillion. But like much in the crypto world, the Bitcoin-linked ETF is a bit complicated. The fund won’t invest directly in Bitcoin itself. Instead, it will focus on futures related to Bitcoin, a market that’s overseen by U.S. regulators and can be complicated in its own right. That means investors need to be particularly aware of what they’re buying, and how it’s likely to perform.

The indirect aspect of this investment was fundamental in the eyes of the American market regulator, the SEC, which has regularly warned about the high volatility of bitcoin, says France24. Regulators have struggled to take a position on the subject of crypto-currencies, whose decentralised network is difficult to control.

Many of the big names in tech and finance on Wall Street have, however, announced new cryptocurrency-related projects in the last twelve months. A year ago, on 21 October 2020, online payments giant Paypal kicked off the price spike by launching a cryptocurrency buying, selling and paying service.

Publié le 26 octobre 2021