Wall Street opened its doors to its first Bitcoin (BTC) Exchange Traded Fund (ETF) on October 19 with the listing of ProShares Bitcoin Strategy (BITO) on the New York Stock Exchange.
The fund attracted over $ 1 billion in trading volume on day one, while BTC price rose to a new record high of $ 67,000.
But spot gains didn’t last too long as BTC cut off some gains over the weekend.
Bitcoin price corrected almost 11% from its all-time high to below $ 60,000 on Saturday, fueling fears of a sell-off, often big after Wall Street launches crypto-derivative products.
Analysts are calling for broader BTC regulation
Nunya Bizniz, an independent market analyst on Twitter, recall Two of these major events: the listing of the first Bitcoin futures contract on the Chicago Mercantile Exchange (CME) and the launch of Coinbase’s cryptocurrency trading service (COIN) on the Nasdaq exchange.
Notably, CME launched its Bitcoin Futures product on December 18, 2017, the day Bitcoin rose to a then record high of around $ 20,000. But the launch also marked the beginning of one of Bitcoin’s longest bear cycles, which bottomed out at around $ 3,200 12 months later.
Likewise, the launch of the famous COIN on Wall Street on April 4, 2021 coincided with Bitcoin’s rise to a new all-time high of around $ 65,000 just ten days later. However, the upward move was faced with a sharp sell-off that caused BTC to correct as low as $ 28,800.
No my god No god please don’t! Are not! Are not! Nooooooooo!
– Nunya Bizniz (@Pladizow) October 22, 2021
As a result, the recent ProShares Bitcoin ETF Bizniz and many other analysts have been concerned about the so-called “buy the rumor, sell the news”. For example, analyst Lark Davis noted that he “wouldn’t be surprised” if bitcoin prices fell after the ProShares ETF was launched, as it did after the CME Bitcoin Futures launch.
#bitcoin CME. Futures
– Announced October 31, 2017.
– BTC increases by 224%
– Started on December 18, the day BTC hit the market high of 2017
It wouldn’t be a shock if the launch of an ETF played out in exactly the same way.
Epic buys rumors, sells news events pic.twitter.com/sKrmhdLxQv
– Lark Davis (@TheCryptoLark) October 8, 2021
In addition, Dan Morehead, CEO and Co-Investment Director at Pantera Capital, wrote in a press release earlier this month that “he may want to get a few chips off the table before Bitcoin is launched.” ETFs.
Impressive start for Bitcoin ETF
Despite the historic drop in prices associated with the popular list of Wall Street cryptocurrencies, some analysts believe the Bitcoin ETF’s impressive rollout will mean limited downward moves across the board.
Todd Rosenbluth, head of ETF and Investment Fund Research at CFRA, told the Financial Times that ProShare’s $ 1 billion rollout was “a sign of a backlog” among companies. Traditional finances are looking for a part of the burgeoning crypto industry .
JPMorgan Chase added that retailers only accounted for 12-15% of net inflows into BITO for the first two days of trading.
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This shows significant interest in Bitcoin ETFs among institutions, with the open interest for Cash Convertible Bitcoin Futures rising to 79% to date and the CME base rising from negative in July to over 16% earlier this week.
Noelle Acheson, Head of Market Insights at crypto trading firm Genesis, noted that Bitcoin’s perpetual futures rotation base, a metric used to measure leverage needs, has increased but is still only 13.08% from 34.6% in mid-April amounts to.
High leverage remains a common factor in recent corrections to the BTC cash market. In other words, the currently neutral funding rate suggests that any major pullback is relatively small.