The First Bitcoin ETF Begins Legal Trading

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Bitcoin Exchange-traded fund (ETF) launch concept. Slovenia, December 24, 2018

Eight years ago, the Winklevoss twins first applied for a legal ETF (Bitcoin exchange-traded fund). That was a long time ago, and since then, the USA SEC has blocked all further ETF trades. That has changed on Tuesday, after the first public Bitcoin ETF was listed on the New York Stock Exchange.

The application was filed by ProShares, a Bethesda-based company that filed an ETF application to start trading on the Bitcoin Strategy Fund. It was a historic mark for ETFs. The fund will trade under the BITO ticker and will track BUSD prices through futures contracts at the Chicago Mercantile Exchange.

While that’s a lot of technical mumbo-jumbo for new investors and regulars, it’s a step forward for the Bitcoin network that may essentially change the way the government sees Bitcoin.

A Major Milestone

According to ProShares’ CEO Michael Sapir, the application is a huge milestone that can change the legal stance on cryptos in the USA for good. The first Bitcoin ETF after 8 years started trading on October 19. After it, three more ETFs are expected to hit the market in the coming months, adding expose to a growing asset class.

Sapir says that 2021 will be remembered for the first crypto-linked ETF. Douglas Yates from the NYSE agreed that it’s a big milestone for cryptos, although he noted that more progress should be made on crypto products before ETFs are taken seriously. ProShares’ CEO said that the fund will provide exposure to crypto investors that have a brokerage account that don’t want to go through the learning curve of establishing new trading accounts.

The launch of ProShares’ fund shares is a result of no action from the SEC (Securities and Exchange Commission). The agency has been blocking ETF trading for over 8 years, changing the tune on cryptos last week. Gary Gensler from the SEC decided that the agency won’t block future ETF trades and proposals after a giving it a lot of consideration over the summer. It could prove a watershed moment for cryptocurrencies in the USA that could change the legal ground forever.

Still Not Official

While the SEC is widely expected to lift the ban on ETF trades as early as next month, it could be a rocky road to approval. Bitcoin ETFs are considered the Holy Grail for many, opening the doors to major investments. The SEC has so far blocked all attempts, but that could soon change.

So far, the agency has cited Bitcoin’s volatility and instability as the main factors behind the blocked ETF trading attempts. Gensler once referred to the crypto market as the “Wild West”, but in light of all the legal changes such as El Salvador accepting Bitcoin as legal tender, the sentiment around Bitcoin has started changing.

While ETF trades won’t open the floodgates to full Bitcoin legalization, it’s a step in the right direction. It represents a major evolution in the move toward funds based on Bitcoin spot prices, which will surely change the legal sentiment around cryptocurrencies in the USA.

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October 20, 2021: • No Comments

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