Daily Column – 18th October 2021

The famous twins who first thought of Social Media giant – Facebook, that is the Winklevoss brothers first filed an application for a bitcoin exchange-traded fund, 8 years back in 2013, marking the beginning of the cryptocurrency boom (ETF). After eight years and a slew of rejections, the first bitcoin-based exchange-traded fund (ETF) might begin trading today.

Armed with a brokerage account, any investor will be able to obtain exposure to the world’s most valuable cryptocurrency through the ETF, which was launched by the fund management ProShares.

We didn’t say “purchase the cryptocurrency” because it isn’t what is taking place. In order to invest in bitcoin, investors must purchase futures contracts, which allow them to speculate on the price movements of an underlying product without really owning it.
The SEC, Wall Street’s chief law enforcement officer, feels far more comfortable approving a bitcoin ETF that is based on futures contracts than than one that directly purchases the tokens. Since 2017, bitcoin futures have been traded on the Chicago Mercantile Exchange, which is a regulated exchange. Bitcoin itself, on the other hand, is purchased and traded on a variety of exchanges that operate outside the jurisdiction of the SEC.

It is unknown whether or not the ETF will be a success.

With just $15 million in wealth management two months after its introduction, the first MF based on bitcoin futures was considered a blip on the radar when compared to the $21.3 trillion mutual fund market in the United States, according to the fund’s website.

And the news of the ETF was met with a resounding “meh” from several cryptocurrency specialists. While it is possible that a bitcoin futures ETF will not accurately track bitcoin values, many stakeholders are comfortable with the present options available for purchasing bitcoin, according to a recent survey.

Whats in the road ahead?

The price of bitcoin could fluctuate significantly over the next few weeks, as four distinct bitcoin futures exchange-traded funds (ETFs) are expected to begin trading this month.

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