Bitcoin took another step closer to mainstream investing Tuesday with the launch of a new security on Wall Street tied to futures of the cryptocurrency.
To mark the occasion, ProShares, leader in exchange-traded funds, a type of investment linked to an index, rang the opening bell of the New York Stock Exchange on Tuesday.
The Bitcoin Strategy ETF, trading under the "BITO" ticker, rose 4.9 percent to $41.94 (roughly Rs. 3.150) in its first session, an eagerly-anticipated event in the world of cryptocurrency-money that boosted Bitcoin futures. Bitcoin price in India stood at Rs. 50.19 lakhs as of 10am IST on October 20.
fThe arrival of the fund helped propel Bitcoin back near its all-time high. Near 2030 GMT, the digital currency stood a $64,313 (roughly Rs. 48.3 lakhs), less than $600 (roughly Rs. 45,000) short of its April record.
Unlike mutual funds, which are traded only once a day, ETFs can be transacted throughout the trading session, making them more like individual stocks and increasingly popular with everyday investors.
Rather than a direct investment in the digital currency, BITO will invest "primarily in Bitcoin futures," ProShares said.
The Securities and Exchange Commission has repeatedly rejected ETFs linked directly to Bitcoin, maintaining that they were subject to market manipulation.
SEC Chair Gary Gensler said futures connected to Bitcoin also could be volatile, but noted that the ProShares ETF is linked to a futures contract that has been regulated by the Commodities Futures Trading Commission since 2017.
"I think what you have here is a product, it's been overseen for four years," Gensler said on CNBC, adding that the SEC has jurisdiction over the ETF under longstanding US law.
"So we have some ability to bring it inside of investor protection (but) it's still a highly speculative asset class," he said. "Underneath this, it still has that same aspect of volatility and speculation."
Other funds are planning ETFs linked to Bitcoin including Valkyrie Investments.
Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.
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