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Bitcoin ETF Success May Inspire Others to Join ETF Bandwagon
With the entry of ETFs, cryptos will now reach of many traditional and institutional investors.
Photo Credit : Shutterstock
The New York Stock Exchange (NYSE) made history by listing the Bitcoin ETF for the first time. The largest cryptocurrency jumped as much as 3.1percent to $66,084, surpassing its previous peak from April by clocking a growth of 120 percent in 2021. With the entry of ETFs, cryptos will now reach of many traditional and institutional investors, experts said.
“We witnessed an increase in activity on the CoinSwitch Kuber platform post the launch of the Bitcoin ETF and the all-time-high spurred from it. The record high denotes the legitimacy and longevity of Bitcoin as a digital asset providing the possibility of wealth creation to investors. ETFs are regulated and, given the regulatory uncertainty in India, we hope the Indian regulators would take this into consideration when formulating a framework that will enable Indian crypto investors to participate in this new revolutionary innovation, reveals Ashish Singhal, Co-founder & CEO, CoinSwitch Kuber.
Bitcoin futures are a type of price-tracking trading contract entered into by two parties, wherein both the parties agree to purchase or sell Bitcoins at a predefined price at a later date, as claimed by a report by CoinDesk explained. This kind of trading happens on a commodities exchange.
Industry pundits claims that the advent of ETF, the disadvantages of investing in a Trust like low liquidity and redemption issues will not be there anymore. The fund, which trades on the NYSE under the ticker symbol BITO, does not invest directly in bitcoin, but seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contract.
Cryptocurrency exchange players claimed that an ETF instrument is far more acceptable to mutual fund managers and pension funds as it carries much less risk than a closed-ended trust like Grayscale Bitcoin Trust GBTC.
As Vikram Subburaj, Co-Founder and CEO, Giottus Cryptocurrency Exchange puts it, “The response Bitcoin ETF has received is indeed a worrying factor for GBTC (Greyscale Bitcoin Trust), which was till date the most famous regulated investment vehicle in cryptos in US. It is to be noted here that the Greyscale trust has already put in a request to the SEC to convert its shares to ETF to ride the ETF wave.”
Likewise, Kumar Gaurav, Founder & CEO of Cashaa maintains, “There are 3 more ETF are planned to be roll out in few months. After institution, small nation states accepting that bitcoin actually works is the main reason for all-time high. There are few ETF are in progress which are built on Ether.”