Bitcoin Hits 6-Month High as First Bitcoin Futures ETF ‘BITO’ Starts Trading
Bitcoin’s price surged Tuesday to a six-month high, climbing past $63,000 as ProShares’ much anticipated exchange-traded fund (ETF) began trading on the New York Stock Exchange (NYSE).
The largest cryptocurrency has climbed 33% over the past month on expectations that the U.S. Securities and Exchange Commission (SEC) would approve the exchange-traded fund investing in futures contracts tied to the cryptocurrency.
The ProShares Bitcoin Strategy ETF started trading at 9:30 a.m. ET as the bell rang to open the day’s session on the NYSE. The stock ticker is $BITO.
The first of its kind, the ETF offers investors the opportunity to gain exposure to returns of BTC with the ease of buying a stock in a brokerage account. The SEC approved the ETF on Friday, and several other pending ETF proposals could win approval later this week.
The big question for cryptocurrency traders is how much additional upward price pressure might come from the debut of the new ETF.
Michele Schneider, managing director at MarketGauge, said on CoinDeskTV Tuesday that she likes to wait at least a week coming out of the gate with a new stock offering to evaluate whether it’s successful.
“So if we get good volatility, good liquidity and we develop some kind of ongoing interest and we see the coin itself continue to move up, then I think that would probably be enough evidence,” said Schneider.
The ProShares ETF is structured to invest in bitcoin futures contracts traded on the Chicago-based CME, rather than investing in the cryptocurrency directly. So the ETF by itself won’t introduce any new demand for bitcoin, but traders might buy more bitcoin as they look to hedge against the futures price or take advantage of pricing disparities.
According to data published on ProShares’ website, the ETF started the day with seed capital of $20 million:
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/ONBIH42FFJDNLO3TSVS3FKCY6I.jpg )
Dave Nadig, director of research at ETF Trends, tweeted that trading in $BITO appeared “orderly” and “stable” in the early moments after the ETF went live.
Helene Braun contributed to this report.
Lyllah Ledesma is a reporter on CoinDesk’s Markets team.
Subscribe to First Mover, our daily newsletter about markets.
By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy.
