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- Bitcoin surged to an all-time high on Wednesday, a day after the debut of the first US bitcoin futures-based exchange-traded fund (ETF)
- The world’s largest cryptocurrency hit a peak of US$67,016.50 (A$89,046.64), trumping a previous record high of US$64,895.22 (A$86,228.04) on April 14 this year
- Market participants say the launch of the ProShares Bitcoin Strategy ETF is likely to boost investment in the digital asset
- The fund closed up 2.59 per cent on Tuesday at US$41.94 (A$55.73), with roughly US$1 billion (A$1.33 billion) worth of shares trading hands that day alone
- However, the absence of large block trades suggests that institutions are staying on the sidelines for now
Bitcoin surged to an all-time high on Wednesday, just a day after the debut of the first US bitcoin futures-based exchange-traded fund (ETF).
The world’s largest cryptocurrency jumped 3.3 per cent to US$66,364.72 (A$88180.60) after hitting a peak during the day of US$$67,016.50 (A$89,046.64). Both figures trump a previous record high of US$64,895.22 (A$86,228.04) on April 14 this year.
Tuesday marked the first day of trading for the ProShares Bitcoin Strategy ETF, which market participants say is likely to boost investment into the digital asset. According to ProShares, the ETF is “designed to provide investment results that generally correspond to the performance of bitcoin”, although the fund does not invest directly in the cryptocurrency.
It closed up 2.59 per cent on Tuesday at US$41.94 (A$55.73), with shares worth roughly US$1 billion (A$1.33 billion) changing hands that day alone on Intercontinental Exchange Inc’s NYSE Arca exchange under the ticker BITO. That trend continued on Wednesday, with shares last up 3.76 per cent at US$43.52 (A$57.83).
Meanwhile, the Valkyrie Bitcoin Strategy ETF, which was to debut on the NASDAQ on Wednesday, appeared to be delayed after its prospectus was amended in a filing with the US Securities and Exchange Commission (SEC). A person with knowledge of the matter said it would launch on Thursday, but that has not yet been confirmed.
According to analysts, trading seemed to be dominated by smaller investors and high-frequency trading firms. The absence of large block trades, analysts added, suggests that institutions are staying on the sidelines for now.
James Quinn, managing partner at Hong Kong-based cryptocurrency private wealth manager Q9 Capital, said the launch of the new ETF was “meaningful” for bitcoin.
In theory, any licensed brokerage firm in the US can take on the ETF as easily as any other, which “should make it available to a lot of folks,” Mr Quinn said.
While the ETF is based on bitcoin futures, Mr Quinn argued that the trades and hedges underpinning the ETF meant activity would ultimately flow into the spot market and bitcoin price.
