The first North American Bitcoin ETF has raised more than $ 400 million in assets under management since its launch. The name of the fund is “Purpose Bitcoin ETF” and trading produced under the ticker (BTCC). Analysts believe that “while maintaining the current pace, this ETF will become the largest in Canada in 20 days”. According to Bloomberg analyst Eric Balchunas, this ETF is likely to reach $1 billion in assets under management on Feb.26. Balchunas also said that the volume of this ETF is one of the highest in the history of North America. Most of them make less than $ 16 million on their first day.
High demand for ETF
As noted by Bloomberg, the trading volume shows the high demand for the tool and underlines the willingness of people to invest in cryptocurrencies. The agency adds that similar tools for investing in cryptocurrencies already exist in Europe, although they are not called ETF.
Attention to Bitcoin is constantly fueled by major market players. For example, the head of Tesla Elon Musk, or large hedge fund managers: Alan Howard or Paul Tudor Jones. Although some experts tend to see such demand as signs of artificially inflating the price of the first cryptocurrency.
So far, analysts are cautious in forecasting the future of this fund. However, a fund of this type will take less commission from investors than other market products that conduct transactions with cryptocurrencies. Another plus of such funds is that investors will not need to understand the assets offered by the fund. An ETF allows investors to buy shares of an underlying asset, this time BTC, without having to purchase the asset itself.
Unsuccessful attempts to approve the ETF in the US
For several years in a row, American companies have tried unsuccessfully to approve the first Bitcoin ETF through SEC. In the US, there have been several applications for the establishment of a Bitcoin-linked ETF. But the high volatility of the cryptocurrency makes it difficult for regulators to approve such a fund.
However, as it turned out now, in Canada the state of affairs on this issue is slightly better than in America. Local financial regulators gave the green light for the first Bitcoin ETF managed by Purpose Investments in the North America. This event should give rise to a new wave of adoption of the main cryptocurrency in the world. In Canada, other applications for launching an ETF have also been submitted. The solution at the stage of adoption, but after the approval of one, probably all others will also be agreed.
Market participants expect that the move by Canadian financial regulators could serve as a precedent for the approval of digital assets by similar authorities in America. When this does happen, Bitcoin will become available to significantly more investors.
SEC Commissioner Hester Peirce recently expressed her view that US markets are ready to accept Bitcoin Exchange Traded Product (ETP), without specifying if it will be an ETF or something else.
We believe that the decision by Canadian regulators was an important step towards large-scale adoption of cryptocurrencies. Now Bitcoin and other coins will be taken even more seriously by investors who have already appreciated the benefits of blockchain technology. And people unfamiliar with coins will get a chance to fix it. In addition, Bitcoin-ETF provides an inflow of investments in the cryptocurrency, which supports its growth. For example, after the launch of the ETF, the bulls took the market under their control, and bitcoin gained about 5%. Thus, further ETF approval will have a positive impact on the bitcoin rate and on the cryptoindustry as a whole.