Bitcoin exchange-traded funds (ETFs) have proven to be far more powerful than Bitcoin futures.
Both have the symbolism that the existing financial world recognized cryptocurrencies (virtual currencies) such as Bitcoin. However, the influence of Bitcoin ETFs overwhelms the influence of Bitcoin futures.
There is a saying in the capital market, ‘buy on rumors and sell on news’. With the news of the launch of the Bitcoin ETF, there were many predictions that Bitcoin would rally after it was launched.
Bitcoin futures were like that. Bitcoin Futures was officially launched in January 2018. Ahead of this, at the end of 2017, Bitcoin rallied to $19,000. It was the first Bitcoin rally.
At that time, cryptocurrency investors cheered that the existing financial sector finally recognized Bitcoin and concentrated on buying Bitcoin.
However, when Bitcoin futures were released, Bitcoin began to fall, and then went into hibernation. It was a moment where the maxim of ‘buy on rumors and sell on news’ was right.
But this time it’s different. After the official launch of the Bitcoin ETF, Bitcoin is rising even more.
This is because Bitcoin futures and Bitcoin ETFs are different. Futures are a significant burden for ordinary investors to trade. Because you have to pay a large amount of margin. Therefore, it is difficult for individuals other than institutional investors to trade.
After the launch of Bitcoin futures, institutional investors decided that the market did not form and postponed their investment. As a result, Bitcoin futures became obsolete. Therefore, the price of Bitcoin also went into hibernation.
But Bitcoin ETFs are different. This is because individual investors can easily trade. The Bitcoin ETF launched by ProShares this time is linked to Bitcoin futures traded on the Chicago Mercantile Exchange (CME).
However, Bitcoin ETFs are, in a word, like stocks. Ordinary individuals can buy and sell Bitcoin ETFs as easily as stocks.
When the first Bitcoin ETF launched by ProShares was listed on the US stock market on the 19th (local time), individual investors from all over the world flocked to it.
Trading volume on the first day reached nearly $1 billion ($980 million), making it the second-largest trading volume in ETF history. The Bitcoin ETF surged nearly 5% on the day. The next day, the Bitcoin ETF surged 3.20%.
This is because Bitcoin ants around the world are passionate about Bitcoin ETFs and are eager to buy. Korean ants also bought 12 million dollars (14.1 billion won).
If Bitcoin futures were literally a ‘symbolic’ event in which the existing financial sector recognized cryptocurrency, the Bitcoin ETF could be said to be a ‘substantial’ event in which the existing financial sector recognized cryptocurrency.
Moreover, Bitcoin ETFs are not a one-time boon. This is because other ETFs will follow after the launch of ProShare’s Bitcoin ETF.
The industry predicts that a total of nine ETFs will be listed within this year, in addition to ProShare’s Bitcoin ETF listed this year. This means that good news will continue in the future.
When the price of a Bitcoin ETF rises, Bitcoin is bound to rise as well. This is because they are coupled (synchronized) to each other. It looks like the Bitcoin rally will continue for the time being.
