There is a lot of interest in the Bitcoin futures market, and this week we saw investors move to take profits. However, many confused with little knowledge about how these products work bought them anyways- resulting in an early morning crash for those who were unprepared. These events lead us to believe that there will be more ups as well as downs as time goes on – but our opinion remains bullish on BTC’s short term future
The “bitcoin etf approval 2021” is the result of a long-awaited decision by the SEC. The ETFs will be created to allow investors to invest in bitcoin without having to worry about price fluctuations.
The same action yields a different outcome.
Nothing has affected the digital asset markets like the several newly established ETFs in recent weeks. The ProShares Bitcoin Futures ETF (BITO) was able to take advantage of a first-mover advantage when it initially debuted, finishing the day up over 2.5 percent.
Valkyrie’s Bitcoin Strategy ETF debuted on the Nasdaq a few days later, but with less remarkable results, concluding the day down about 4.5 percent. Unfortunately, this was due to bad timing, as the whole digital asset market began to decline as the weekend approached.
It will be fascinating to observe which way the VanEck Bitcoin Strategy ETF swings when it launches on October 25th.
Popularity in the stratosphere
With the debut of the ProShares Bitcoin Futures ETF being one of the most successful of its type (ever) – with over $1 billion in AUM in its first 48 hours – it has created an unanticipated dilemma for itself.
The fund is only allowed to have a maximum of 2000 contracts open each month under its present structure. Even though it has only been operating for a few days, it is already approaching this limit for October and November. As a result, ProShares has apparently asked for an exception from these restrictions, claiming that there is a clear and overwhelming demand for their product.
Although there have been some issues with the Bitcoin Futures ETFs, its introduction has been a good event overall. Bitcoin hasn’t crashed, its volatility hasn’t soared, and a wider variety of investors may now have exposure to the world’s most popular digital commodity — however indirect that may be. What can we anticipate from such items now that this is the case?
While some have pushed for a real spot-market Bitcoin ETF, it looks that a futures-based Ethereum ETF will be the next to be authorized. Not only has Ethereum maintained its position as the second most valuable digital asset for years, but it is also one of the few assets to have senior regulators openly state that it is not a security.
It is not a leap to envisage an Ethereum Futures ETF launching in the near future, given the popularity of Ethereum, the power of its network, regulatory status, and current futures products.
Reaction of the Market
Is the activity we’ve observed in the last two days unusual? No. The broader digital asset market experienced a phenomenal run-up the week before, with BTC hitting new all-time highs. Because they were in unexplored area, everyone who had Bitcoin was in the black (excluding trading activity). As a result, there were certain to be a slew of investors trying to cash in on the opportunity by locking in gains.
Now that this brief period of stabilization has passed, and BTC bulls have successfully defended the $60,000 level, it looks like BTC and the market as a whole are prepared to continue their remarkable ascent towards the coveted $100,000 milestone.
In the meanwhile, the BTC price has fallen from ‘severe greed’ to ‘greed’ in recent days. With previous bull markets lasting into the mid-90s, the present level of 72 seems to signal that there is still opportunity for growth, and that $100,000 BTC is not out of reach.
The “proshares bitcoin strategy etf” is a fund that invests in Bitcoin futures. It has been up since the start of the year, but it’s not all good news for crypto traders. “The ETFs have already seen their best days,” according to one analyst, who predicts profit taking in the coming weeks.
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