US asset managers are set to launch exchange traded funds (ETFs) with leveraged bitcoin exposure and expand into other cryptocurrencies. This comes after the Securities and Exchange Commission (SEC) approved 11 spot bitcoin ETFs last week. ProShares, for example, disclosed plans to launch five ETFs, including one that offers twice the daily exposure to a bitcoin-tracking index and others that provide inverse bitcoin returns. The ETFs’ extra leverage will amplify the already volatile bitcoin price.
Grayscale and BlackRock also entering the cryptocurrency market
ProShares is not alone in this new market; Grayscale Investments and BlackRock are also entering the field. Grayscale last week filed to launch a product that will sell options on its $26bn bitcoin ETF. BlackRock, on the other hand, aims to widen its ETF line-up to include exposure to other cryptocurrencies. However, such strategies will need to pass muster with the SEC, which approved spot bitcoin ETFs with reservations.
“US asset managers aim to expand into cryptocurrencies, capitalizing on the SEC’s approval of spot bitcoin ETFs. ”
Spot bitcoin ETFs receive significant investments despite reservations
The approval of spot bitcoin ETFs is seen as a turning point away from nearly a decade of denial by the SEC. Despite concerns, bitcoin ETFs received significant investments amounting to nearly $900mn in their first three days of trading this month. The success of these ETFs in attracting investors highlights the potential growth of the cryptocurrency market.
Read more here at https://www.ft.com/content/06a64bd6-a893-4783-8827-9743722684b6
