ProShares and Valkyrie Bitcoin (BTC)-based ETFs' popularity plummets
Just a few days ago, the world’s first Bitcoin ETF under the ticker BITO was launched on the New York Stock Exchange. It is worth noting that this fund was enjoying an overwhelming success because, in two days, its trading turnover reached $1 billion (~£730 million), making it the second-largest ETF. Besides, a Valkyrie Funds Bitcoin ETF was launched and gained a certain popularity among investors.
Short-term success followed by a slump
Yet, the hype surrounding this topic is rapidly calming down. For example, ProShare’s BITO ETF saw a 3.19% rise in price on the first day, then fell sharply by 6.51%. Its popularity has been decreasing ever since.
A similar situation is happening with the Valkyries BTF, with the initial cost of $25 (~£18.2), which rose slightly at launch but eventually fell to $24.3 (~£17.5), although this is not so obvious compared to BITO, since BTF was launched a little later.
Bitcoin ETFs positive effect on the crypto market
Still, the influence of Bitcoin-based ETFs on the cryptocurrency market is undeniable, as the very next day after the launch of the first ETF, Bitcoin reached its ATF, exceeding $66,000. In addition, the US Securities and Exchange Commission (SEC) did not give the green light to Bitcoin ETFs for a very long time. So, when it finally approved them, it sparked great interest from both investors and those with little crypto experience. All this has had a positive impact on the ecosystem in general and Bitcoin in particular.
For many experts, the sharp decline in hype came in unexpected. For example, a few days ago, JPMorgan analysts said that the main reason for Bitcoin’s growth was not the ETF launch but the perception of Bitcoin as a better inflation hedge. They also suggested that the interest in new Bitcoin ETFs is bound to drop over time.
However, this does not mean that everyone will simply forget about these ETFs in a few weeks. They are still an investment product offering a safe and attractive option for those who want to invest in cryptocurrencies but are sceptical about investing in products not approved by the SEC. This, in turn, attracts more people to this industry, thereby making the digital asset market much more popular globally.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.