Tag: Eric Balchunas

Bitcoin Futures ETF Exceeds Expectations, Trades $1 Billion On Day One

by NEWSBTC

The numbers are in, and the Bitcoin Futures ETF had the biggest debut of the year. By far. We have to “exclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA,” but that’s fair. Apparently, the ProShares Bitcoin Strategy ETF got to the top naturally, via real trades by real people and institutions. Considering that just its approval by the SEC seemed to catapult Bitcoin’s price to the edge of an All-Time High, a question arises. How will the market react tomorrow? And the day after that?

Related Reading | Bitcoin ETF Check, What’s Next For BTC

But let’s avoid speculation and check Senior ETF Analyst for Bloomberg, Eric Balchunas’ charts:

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Considering the first-ever Bitcoin Futures ETF “also traded more than 99.5% of all ETFs,” it’s fair to say the launch was a huge success. What does it mean for the following ETFs? According to Balchunas, it’ll be hard for them to succeed. “Every day counts because once an ETF gets knows as ‘the one’ and has tons of liquidity, it’s virtually imposs to steal.” And, what does this mean for the market in general? NewsBTC already covered this question:

“Although these ETFs have attracted criticism for being backed by futures contracts and not the underlying asset, they could still have big implications for Bitcoin — allowing tax-sheltered and retirement accounts to easily get exposure, and potentially opening the cryptoasset to a much broader audience.”

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Why Is There A Bitcoin Futures ETF Instead Of A Bitcoin ETF?

Who better to answer this question than the SEC’s chairman himself, Gary Gensler told CNBC: 

“What you have here is a product that’s been overseen for four years by the U.S. federal regulator CFTC, and that’s being wrapped inside of something within our jurisdiction called the Investment Company Act of 1940, so we have some ability to bring it inside of investor protection.” 

So, the Bitcoin Futures ETF falls under the Commodity Futures Trading Commission jurisdiction. Plus, it tracks the Chicago Mercantile Exchange (CME) Bitcoin futures. And the SEC considers that the institutional support will protect the customer. According to them, the underlying asset, Bitcoin, is too volatile and subject to manipulation.

The first persons to propose a Bitcoin ETF in the USA, the Winklevoss twins, lament that when they did the price of Bitcoin was $68 and nowadays is $64K. “That’s almost a 1000x return in the meantime. I’m glad we got here, but it has taken too long.”

Also a skeptic of the Bitcoin Futures ETF‘s long term potential, Anthony Bertolino, VP of growth at iTrustCapital, told CNBC:

“The launch of the first bitcoin-linked ETF in the U.S. will bolster the broader crypto market and help an entirely new investor class experience the benefits of bitcoin as a legitimate asset. However, a derivatives-based bitcoin ETF is not where we want to be long-term.”

BTCUSD price chart for 10/20/2021 - TradingView

BTCUSD price chart for 10/20/2021 - TradingView


BTC price chart for 10/20/2021 on Forexcom | Source: BTC/USD on TradingView.com

What Are The ProShares Bitcoin Strategy ETF’s Characteristics?

The next few days will be crucial for this story. There’s a possibility that today’s demand was orchestrated, at least in part. If this happened, it’ll be very obvious in the following days. In any case, the fund’s official site defines the first Bitcoin Futures ETF as:

“ProShares Bitcoin Strategy ETF (BITO) is the first U.S. bitcoin-linked ETF offering investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way. The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts.”

Related Reading | Grayscale Investments Set to File for Bitcoin Spot ETF as Competition Heats Up

And alerts the clients that “The fund does not invest directly in bitcoin,” and that “The price and performance of bitcoin futures should be expected to differ from the current “spot” price of bitcoin.” Forewarned is forearmed.

Featured Image: Screenshot of the ETF's opening bell ceremony| Charts by TradingView

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New tickers and ARK filing shows Bitcoin futures ETF approval imminent: Analyst

by Cointelegraph

Bloomberg’s senior ETF analyst says there are “good” signs that a Bitcoin ETF will soon be approved, pointing to Ark Invest filing for a Bitcoin futures ETF with an assigned ticker and Valkyrie updating its own ETF prospectus with a ticker.

Cathie Wood’s Ark Investment Management LLC filed for a Bitcoin (BTC) futures ETF under the ARKA ticker, while Valkyrie has assigned its BTC futures prospectus with the BTF ticker.

According to Bloomberg analyst Eric Balchunas, firms typically update their proposals when they have everything set and “ready for launch,” suggesting that Valkyrie may soon be given the green light by the U.S. Securities and Exchange Commission (SEC).

Balchunas also pointed to Ark Invests’ Bitcoin futures ETF application on Oct. 13 in partnership with 21Shares and whiteAlpha Architect white label, noting that the assigned ARKA ticker was “another good sign” that the SEC was set to give a tick.

Referring to Valkyrie’s ETF, the analyst added that he looks for “these type” of updated prospectus filings when determining whether an official SEC greenlight is incoming, and said that applicants often update the final details “right before” launch. He conceded that with the crypto sector, nothing is certain however.

Permabear Mr Whale downplayed the significance of the Ark Invest news saying all Ark did was update its “ARKW ETF prospectus” to say that it may gain exposure to BTC via exchange-traded funds in Canada.

However Ark’s latest ETF filing with the SEC has no mention of the word “Canada” and the application clearly outlines that the fund is seeking to invest in “exchange-traded Bitcoin futures contracts that are cash-settled in U.S. dollars” on the Chicago Mercantile Exchange (CME).

The price of BTC has surged 28% since the start of October to sit at around $57,500 at the time of writing. Many onlookers have attributed the recent pump to expectations that the SEC will soon approve a futures-based Bitcoin ETF.

Related: SEC Chair Gary Gensler actually is pro-Bitcoin, Volt Equity CEO argues

Balchunas stated earlier this month that Bitcoin futures-backed ETFs have a high chance of being approved in October. He argued that they are regulated under the “40 Act” which is favored by the SEC as it offers greater consumer protections than physically-backed Bitcoin ETFs regulated under the “33 Act.”

“Yes, the SEC has kicked can on Bitcoin ETF approval BUT that is for the physically-backed ones under ’33 Act,” he said and added:

“The futures ETFs filed under the ’40 Act (which Genz loves) are very much alive and likely on schedule (we think 75% chance approved in Oct).”

Opinions vary however and Todd Rosenbluth, senior director of ETFs and mutual fund research at research firm CFRA argued this week he believes that approval of a BTC futures ETF may be delayed until 2022.

Speaking on CNBC’s ETF Edge, Rosenbluth stated that the current clouded regulatory landscape could cause further delays and that the SEC could be waiting to approve all the ETFs simultaneously to avoid a “first-mover advantage.”

“It’s possible — in fact, we think it’s likely — that we’re going to see a delay of a Bitcoin futures ETF until 2022 until the regulatory environment is more clear,” he said.