Bitcoin rocket in USA run the first Bitcoin fund

The price of the most famous cryptocurrency bitcoin has been on the wave of optimism in recent days. The US Securities and Exchange Commission has approved the first US publicly traded fund to be linked to this cryptocurrency.

The price of bitcoin is currently just below its historic high, which it may soon exceed.

The first-ever publicly traded fund (ETF) linked to bitcoin began operating on Tuesday. The fund, called ProShares Bitcoin Strategy, will allow clients to invest in bitcoin without having to learn to work with a bitcoin wallet or open an account with a cryptocurrency broker.

However, according to US Securities and Exchange Commission (SEC) chairman Gary Gensler, the fund will not achieve what some rock cryptocurrency fans want, a fund that holds cryptocurrencies directly.

ProShares Bitcoin Strategy will not hold any virtual coins but will invest in futures for the price of bitcoin on the Chicago Mercantile Exchange (CME).

Michael Sapir, CEO of ProShares, says it's not easy to quote the real price of bitcoin. According to him, there is no single reliable market reference and prices can vary by up to five per cent between individual cryptocurrency exchanges. At the same time, Gensler of the SEC adds that products based on futures contracts will provide investors with stronger protection thanks to strict laws.

Jakub Jedlinský from Altlift claims that the mentioned ETF is more of a tool for institutional investors, for whom it may be problematic in the USA to place cryptocurrencies directly into their assets.

Small investors have long had other options.

"Small investors have long had other opportunities to expose themselves to bitcoin," he told the editors of SZ Byznys Jedlinský, who also teaches about crypto active activities at the University of Economics in Prague.

"Thanks to this milestone, we will remember 2021," ProShares CEO Michael Sapir told The New York Times. According to him, the ETF is for investors who attract cryptocurrencies but do not want to invest in them through unregulated cryptocurrencies.

"They will welcome convenient access and easy investment in bitcoin in a conventional way," Sapir added. For nearly a decade, not only have cryptocurrency companies applied for permission to run a bitcoin ETF in the United States but their applications have so far been rejected by the SEC. At the same time, many of them remain unresolved.

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"The United States is over-regulated. To put it bluntly, it protects small investors more than most of the world. Therefore, they also have their own versions of exchanges with limited functionality. I see this as the main reason why the focus of the crypto active economy is shifting to Europe, "Jedlinský answers the question of why the approval of the first bitcoin fund ETF in the USA took almost ten years.

According to him, this is a turning point mainly because the American ETF has been talked about for a very long time.

"It's a bit of a fetish, a lifeline that investors are clinging to in times of a bear (declining) market. Now we are practically at historical highs, so launching several ETFs is a nice thing to support a 'bull' mood (ie one that will lead to market growth, ed. Note), but again, I do not see it as such a crucial issue, "he said.

Jedlinský further says that ETFs already exist in the rest of the world, and in the USA, at least since last year, there are other ways in which institutions can indirectly invest in bitcoin. "In addition, it should be borne in mind that these investors can not only buy cryptocurrencies but also 'short-circuit' (speculate on a fall in price). That was when years ago, bitcoin futures began trading on the Chicago CME, ”he adds.

According to Douglas Yones of the New York Stock Exchange, the launch of this ETF is an exciting step, but not the last. He expects many cryptocurrency ETFs to get green. At the same time, Yones says that by launching this fund, the cryptocurrency sector is consolidating its legitimacy. However, some critics remain vigilant against cryptocurrencies, as do some regulators. On the other hand, the "madness" around cryptocurrencies that we may see this year has not yet shown any signs of decline.

Cryptocurrency ETF products are already approved in several countries, such as Canada, Brazil, Dubai, Germany and Switzerland. The United States is also late due to stricter regulations.