The first Bitcoin ETF debuts on the NYSE making the history of the world‘s number one cryptocurrency, which he thanks by flying to the new all-time record.
The euphoria for the crypto-universe fueled by the launch of the ETF has infected the world of digital currencies, leading the person concerned, namely Bitcoin, to tear up the previous high tested in mid-April, equal to $ 64,899, at a higher value. to $ 66,900.
Buy boom also onEthereum, which is getting closer to its all-time records.
Bitcoin fans are trampling and already predicting new highs: there are those who see share $ 250,000 in five years and who pits a target of $ 168,000 before the end of the year.
The first Bitcoin ETF debuts on the NYSE. But Cathie Wood isn’t attending the party
The bullish push certainly came with the fund’s debut ProShares Bitcoin Strategy ETF, ticker ‘BITO’, last Tuesday 19 October:
the ETF offers to investors an exposure to Bitcoin futures contracts, or those contracts that give the holder the ability to buy or sell the asset at a future date at a set price, rather than giving direct exposure to the world‘s number one cryptocurrency. However, this is a milestone for the crypto-universe, which was readily appreciated: the market has in fact rewarded both the new ETF product and Bitcoin.
Big absent in this race to position itself on the ETF, however, has been confirmed Cathie Wood, founder of Ark Investment Management:
“We did not invest (in the ETF) – Wood said, according to what Business Insider reported – We are monitoring the situation very carefully (…) there are some tax ramifications that we would like to understand better, since we are dealing with with a situation of contango, compared to that of a normal backwardation “.
It is worth mentioning that the contango of an ETF it refers to that situation in which the future price of a commodity is higher than the spot price. Instead, we speak of backwardation when the forward (future) price of a contract is lower than the spot price.
Beyond the “fiscal” consequences, it is likely that Wood’s was one tactical statement:
in June, his Ark Invest reached an agreement with 21 Shares to create its own Bitcoin ETF.
About that, Mads Eberhardt, cryptocurrency market analyst at BG SAXO, he pointed out that “there are significant differences between a Bitcoin spot ETF and a futures ETF. One in particular: physical Bitcoins must be held by a custodian, which increases the risk of loss through hacking attacks or trading errors. Furthermore, Bitcoins must be bought, sold and stored in a highly unregulated environment, particularly on native crypto-financial service providers, which the SEC is probably not comfortable with. “
JP Morgan explains new Bitcoin fever with inflation and gold
Returning to the new records set by Bitcoin, the various statements that have arrived in the last few hours have also played a significant part in the rally of the digital currency by titans of the world of high finance.
The billionaire investor Carl Icahn he defined for example Bitcoin the best inflation hedge, precisely in a moment, such as the one we are experiencing, when the flare-ups of prices have become the obsession of investors.
Similar is the view of the legendary trader Paul Tudor Jones which defined Bitcoin a hedge to hedge against inflation better than gold:
“Bitcoin would be a great hedge – said Jones, speaking on CNBC’s” Squawk Box “- Clearly, right now cryptocurrencies are winning the race against gold… I also think they would be a very good hedge against inflation ”.
And if this were precisely the real reason that is leading Bitcoin to reach new heights, namely the fact that it is increasingly perceived as an inflation hedge?
They think so JP Morgan strategists, who are part of Nikolaos Panigirtzoglou’s team, explaining the Bitcoin rally:
“By itself, the BITO (Bitcoin ETF landed on NYSE) is unlikely to trigger a new phase of a significant amount of fresh capital pouring into Bitcoin – wrote the strategists, referring to the ProShares Bitcoin Strategy ETF – We believe that the perception of Bitcoin as a better inflation hedge than gold is the main reason for this rise, as it has been underway since September a transfer of funds from gold ETFs to funds investing in Bitcoin ”.
Escape from gold ETFs, boom in inflows on Bitcoin ETFs
The litmus test is there for all to see.
Just look at the Gold ETFs, a precious metal historically known to be a hedge tool to hedge against inflation.
In spite of investors’ continuing fears about the risk of inflation escaping the control of central banks and even becoming stagflation, these ETFs, instead of being stormed by investors, continue to be hit by a haemorrhage of investments.
L’SPDR Gold Shares ETF – GLD ticker – for example, which has a value of $ 56 billion, is preparing to conclude the fourth consecutive month of outflows which, so far, according to data collected by Bloomberg, which have amounted to more than $ 3 in this period, 6 billion.
It is therefore not the Bitcoin ETF, according to analysts at JP Morgan, the real reason that is triggering the bullish wave of Bitcoin. Also because, it is recalled, investors already have at their disposal “a considerable amount of investment choices” in the world of ETFs that were born by replicating digital assets.
Among these is the Purpose Bitcoin ETF (ticker BTCC) launched in Canada which, after a euphoric reception, has seen the enthusiasm towards him gradually diminish.
The same thing could happen with the ETF that debuted on NYSE the day before yesterday: “The initial euphoria towards BITO could subside after a week ”.