SEC Responds to Major Questions About First Bitcoin ETF


SEC Chairman Gary Gensler and ProShares CEO Simeon Hyman discussed the launch of the first Bitcoin-linked ETF in a CNBC breaking news segment. The Proshares Bitcoin Strategy ETF, also known as BITO, is based on the CME's Bitcoin futures contracts.

CNBC commentator Bob Pisano shared some investors' concern that BTC futures could deviate from the spot price of BTC:

"The futures market is a better place for price discovery," Hyman said. "The CME futures market trades more volume than the largest cryptocurrency exchange in the US. We launched a similar mutual fund on 7/28 and since we launched it on Friday, Bitcoin's benchmark rate is up 52 percent. , our BTC mutual fund is up 52 percent and the BTC Greyscale Trust is up 37 percent. "

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BITO Debut Helped New Bitcoin Highs

The debut of BITO has been helping the cryptocurrency to set new highs. Also, announcements that other BTC-pegged funds, including Valkyrie's Bitcoin strategy ETF, are set to go public on the Nasdaq, have generated new momentum in the cryptocurrency market.

A new fund based on the blockchain industry, called the Volt Crypto Industry Revolution and Tech ETF, also intends to go public soon.

As we had anticipated in recent days, and given that technical and fundamental analysis have coincided, the price of BTC / EUR has registered record highs.

Bitcoin (BTC) Transactions Keep Rising

The launch highlights the remarkable growth of the ETF industry, Will Hershey, CEO of Roundhill Investments, told CNBC. “Trading volumes are exceptional,” Hershey said of BITO’s day one trading activity.

“BITO has traded more than $700 million notional. That puts its first day well ahead of retail ETF favorites like BUZZ and ARKX when compared to their respective launch days earlier this year.”

SEC Wants To Protect Investors

Gensler also talked about "investor protection" and said he feels very good about the fact that the ETF is "wrapped within something within our jurisdiction called the Investment Company Act of 1940."

However, the SEC chief was also quick to point out the risks of bitcoin, saying:

"It remains a highly speculative asset class and investors should understand that underneath this, there is still the same aspect of volatility and speculation."

SEC Director also said, " It’s about ensuring that through transparency and competition that we as investors, the individuals, working families, get the best execution and the best out of their investment platforms and their brokers ".

Do You Know What an ETF Is?

An ETF is an "Exchange Trade Fund"  that is a highly sought-after financial investment instrument. The best way to explain ETF is by using an example:

You have read about the S&P 500 index and realized that some of the stocks will appreciate and you would like to invest in them. However, you can't do that because you don't have enough money for it and it would take you a long time to analyze them.

So you have two options to achieve your previous goal: First, buy the shares that you like best in the company of your choice and wait for the price to rise. Second, invest in an ETF that has shares in companies at the S&P500 index.

Today there are indices and sectors of all kinds, they can be technology, oil, or any other market. For all of them, there is an ETF that seeks the same profitability.

The great virtue of these funds is that they are publicly traded like any other capital market holding company. In other words, you can buy and sell the stock whenever you want.

Among the benefits, we can find in ETFs are the diversification and versatility of this product. The risk is reduced since it is invested in several securities and not only in one. In addition, they are the only exchange-traded funds, i.e., they can be bought and sold at different trading hours.

Thus, you don't need thousands of dollars to get in; all you need is an ETF participant to invest in several companies.

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