The first bitcoin-focused exchange-traded fund rose modestly on its debut on Tuesday.
The ProShares Bitcoin Strategy ETF was up 2% in mid-morning trading at $40.89.
The launch is being closely watched on Wall Street, where finding a way to sell bitcoin-linked securities has been a priority for many firms. Bethesda, MD-based ProShares rang the bell on the New York Stock Exchange on Tuesday to celebrate the launch of its ETF, which goes by the ticker BitOs and holds bitcoin futures contracts instead of the cryptocurrency.
“There are many investors who have brokerage accounts and are comfortable buying stocks and ETFs. We think they’ll love it,” Michael Sapir, chief executive of ProShares, said in an interview.
Other asset managers expected to launch similar funds include Valkyrie Investments, VanEck and others. But Invesco, one of the largest global asset management firms, halted its bitcoin futures ETF on Monday.
“We have decided not to pursue the launch of the Bitcoin Futures ETF in the foreseeable future,” an Invesco spokeswoman said in a statement. The firm said it is committed to working with its partner Galaxy Digital Holdings on the ETF. Crypto instead of futures.
Invesco did not elaborate on the decision.
Thomas Lee, managing partner at research firm Fundstrat Advisors, said the ProShares ETF will enable more individuals to invest in bitcoin. He said the assets in the fund could increase to $50 billion from today’s $20 million.
“This will lead to higher property prices through network effects,” Mr. Lee said. He added that bitcoin is likely to rise from the recent $62,400 to $168,000.
Bitcoin has climbed 45% since September, reflecting a partial buyout driven by the potential launch of the ProShares ETF and rivals.
The ETF came online after an eight-year effort by asset managers to create a fund that held real bitcoin. The Securities and Exchange Commission, which did not support that view due to concerns that bitcoin trading was not transparent enough to protect investors from fraud and manipulation, instead led asset managers to the creation of a bitcoin futures product.
Unlike digital currencies, futures trade on regulated locations such as the Chicago Mercantile Exchange. But futures-based ETFs are sometimes hampered by discrepancies between the futures market and the underlying assets they track.
This story has been published without modification to the text from a wire agency feed
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