The ProShares Bitcoin Strategy ETF (BITO) was introduced on 19th, October 2021 on the New York Stock Exchange. The first day of the exchange-traded fund (ETF) led to an influx of natural value of about $1 billion and within 24 hours of its launch, Bitcoin itself reached a new all-time high (ATH) in terms of US dollars. This happened almost a week after the ETF’s application was permitted to expire by the Securities and Exchange Commission (SEC) in the United States, which effectively gave the green light for the product to move forward. This is undoubtedly a significant step for the country and it has also had an impact on other global markets.
If the ETF continues to be as well-received as its first day, then there is a possibility that more of these will be launched. It is important to note that the ETF does not offer exposure to physical Bitcoin itself, but to derivatives from Bitcoin futures contracts. Of course, purists may not find this very desirable, but it does offer investors a prominent degree of insulation from the inherent volatility of Bitcoin. A success story in a regulated market like the US could certainly be a positive sign for the prospect of similar funds in other countries.
Bringing this kind of exposure to Australian organizations can help the country’s economy and also Bitcoin itself. More importantly, it gives Australia the opportunity to take the lead where financial innovation is concerned and to incorporate crypto in its financial flock. The Australian legislators appear to agree to it for the most part. A recent report was published that a framework had been proposed for putting Australia on a level playing field with countries like the United Kingdom, United States and Singapore. After the success of BITO and the framework in place, BetaShares, the Australian fund management company, has launched its Crypto Innovators ETF that can be found on the Australian Stock Exchange (ASX).
The fund will provide investors with exposure to crypto-focused companies that are part of the Bitwise Crypto Industry Innovators 30 Index. The core portfolio of the index comprises of some major crypto entities, including prominent crypto exchange platform Coinbase, the business intelligence software company MicroStrategy led by Michael Saylor and Bitcoin mining firm called Riot Blockchain. Within 15 minutes of its launch, the fund successfully broke ASX records. By the end of its opening day, the fund had racked up a total of $31.3 million.
BetaShares ETF essentially holds shares instead of physical crypto assets like Bitcoin (BTC) and Ether (ETH). This provides investors with a unique opportunity for participating in the expanding digital asset market, without having to directly buy any physical crypto. As a matter of fact, BetaShares disclosed that almost 85% of its index considers companies that either possess 75% of their assets in crypto directly, or derive 75% of their revenue from the crypto market. This can give long-term returns, with Bitcoin rising, but also mitigates the impact of a reversal that many consider inevitable.