Bitcoin Futures ETFs "True Scent" and "Deception" Coexist?

News that Bitcoin exchange-traded funds (ETFs) are gearing up for the public has boosted Bitcoin's growth momentum over the past few days. In fact, according to the first shot, ProShares was approved by the SEC filing on October 15th and the same day. The bull market, Nasdaq Tos SEC, nodded, announcing that it had accepted a listing with the Valkyrie ETF.

likeUnited States Securities Commission (SEC)As can be seen from the related data released on October 15,The SEC approved the first Bitcoin futures ETF last Friday.ProSharesI applied for Bitcoin ETF last summer orOctober 18It started out as the first Bitcoin ETF (may not start trading immediately).

Currently, it is one of the largest companies in the worldNASDAQEunah Choi, senior vice president and general manager of industry, told the SEC on October 15 that the NasdaqRegistration of Valkyrie BTC ETF securities, also approved the list and is still waiting for the SEC to review and approve it.

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What is the Bitcoin ETF?

ETFs are an important part of traditional finance.This is because when an item can appear on an ETF form, it usually means that the item complies with local regulations and has grown.

ETF, the full name of Market Research;An account opened with a floating market product is listed and traded on a stock exchange. Unlike conventional commodities, the value of ETFs is tracked at the price of one type of asset or asset and is strictly attributed to the value of the type of asset / property.

andA Bitcoin ETF, as the name suggests, is a currency linked to the value of Bitcoin., buy / sell bitcoin ETFs, i.e.You don't have to buy or sell Bitcoin, and you can reap the same benefits as investing in Bitcoin.ETF money managers will buy real world assets, which also means that if the ETF is successful, there will be a huge demand for further purchases in the Bitcoin market.

An ETF is an investment instrument that tracks the performance of an asset or a group of assets.ETFs allow investors to diversify their investments without having a real investment.For an investor who focuses on income and loss, ETFs are an easier option than buying and selling real estate.Bitcoin ETFs allow traders to buy ETFs without having to go through the difficult Bitcoin trading process.Additionally, ETF holders do not have to worry about securities and security procedures required by cryptocurrency traders as they do not invest directly in Bitcoin itself.

Yes No,The SEC is currently reviewing 40 Bitcoin ETF applications., the deadline for determining future product launches is next week. In addition to ProShares, several similar products are expected to hit the market this month, and end-of-day approved products from Invesco, VanEck and Valkyrie have been counted.Executives are expected to agree on at least some of these, according to Bloomberg News, clearing the way for them to start working.The SEC is not required to make a decision to approve this information, and federal law allows the filing of the request if the SEC allows the deadline to be exceeded without delay. must modify or advise counsel to withdraw the request.

According to Bloomberg, the following statements indicate the circumstances under which certain ETF applications may be approved in advance by the United States Securities and Exchange Commission (SEC).

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Can it take important steps in financial history?

This form is an "upgrade" for digital devices.

For a long time, industry players have explored the origins of Bitcoin ETFs.Gemini founders Tyler and Gameron Winklevoss first looked for ETFs in 2013.And they applied for Bitcoin ETF with the SEC to provide an open currency Bitcoin ETF that can be traded on the Nasdaq market, but the request was rejected by the SEC. The United States Securities and Exchange Commission has rejected all previous requests and has not commented on its work on 30 other pending requests.

Bitcoin ETFs will make it easier for major investors to gain exposure to Bitcoin, which should be a boost for the future of cryptocurrencies.The launch of the Bitcoin ETF could become one of the options for both trading and equity, absorbing significant revenue for the cryptocurrency market and spurring rapid growth for the entire industry.

Supporters of Bitcoin ETF believe that by offering investors an alternative to digital assets, it will be easier for investors who prefer Bitcoin to acquire the product rather than avoid cryptocurrency sites.SEC Chairman Gary Gensler believes the legislation under which future ETFs are governed provides better protection for investors.: ETFs track the price performance of cryptocurrencies, primarily by buying Bitcoin futures contracts to trade in securities such as the Chicago Mercantile Exchange (CME), instead of buying real Bitcoin.

For example, Wall Street embraces ETFs, the futures price, or the spread between the futures price and the sell price, increasing, increasing the profitability of the cash arbitrage strategy. The meaning of arbitration is publicized and benefits from the final convergence of the two values. (The future price converges with the growth rate.)

Additionally, if the ProShares ETF is made public on Tuesday, other similar products could also start trading soon, including the Invesco Bitcoin Strategy ETF, the VanEck Bitcoin Strategy ETF, the Valkyrie Bitcoin Strategy ETF and the ETF Galaxy.

Sister tab,SEC only clears future ETFs for publication this year—— SEC Chairman Gary Gensler's backing for future ETFs has hinted that he will not allow any ETF market to start in the near future.

However, this is a small but important step in opening up the crypto industry to a wider audience.

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There may be dangers that cannot be ignored

Future ETFs will attract key investors to the crypto industry. However, since these devices include future costs, they often do not meet the following criteria.

One of the easy ways to ignore the risks of Bitcoin futures ETFs is that they might bring investors back.

The ProShares BTC ETF said in its statement that rollover risk is a significant risk for investors. “Future payment delays could lead to a big drop in income. "

The “future premium” statement is that the silver will not match the working price of Bitcoin. This represents the unrealistic need for capital, since the market value of long-term contracts is often higher than that of short-term contracts.In the futures market, it is considered normal that the value of a long-term contract is greater than the value of a short-term contract, which is known as the “term premium”.

The spread usually relates to the cost of storage, such as oil or soybeans. There is also a time value of money. The added value that a merchant can get when they put their money in a safe, such as a treasury bill.

In the Bitcoin market, future payments are largely driven by the expectation of higher prices. In Bitcoin Futures ETFs, future payments may be responsible.Investors flocking to these new currencies may be affected by the "future payout" which may be much less than buying Bitcoin directly.

ETFs based on futures contracts allow investors to access assets through futures contracts allowing them to buy and sell assets below the approved price in the future.However, most fall into this process., due to the growth, the contract price will be similar to the price, while the monthly contract price always changes.Traders can sell an expired contract at a loss and buy the next contract at a higher price.

For example: According to data from CME, the current market value of the October Bitcoin contract is US $ 58,000, which represents a value of around US $ 500 on the site, and the Eleven The monthly contract expires at $ 58,500 US, which represents a value of $ 1,000.Expect the new Bitcoin Futures ETF to buy the October contract at its current price. At the end of the month, the bond price in October will evaporate.So if the money restart is successful, he will eventually have to sell the October contract for a loss of $ 500 or 0.86% (10.34% annually) and buy the payment terms of next month's contract.

Additionally, the government's current attitude towards cryptocurrencies has not improved, so every investor in the frenzied industry needs to be humble and reasonable.

That said, the potential risk of future ETFs will not deter investors from investing their money in commodities.. For most venture capitalists, trading fast can leave them frustrated and investing with the wave.Ignore the potential for danger.

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Contents

ETFs and Bitcoin, two of the world's most popular global investments, will meet quickly and be no exception.It will be a long wait time for investors and investors who wish to use their Exchange Index Fund (ETF) to get involved in the popular cryptocurrency market.

Once the Bitcoin ETF is set up and approved for trading, in addition to tracking gains, large investments can be made to support the price of Bitcoin and support the bull market in the cryptocurrency market.

Despite its importance, some crypto traders believe that these steps are not enough.Because it will be linked to derivatives of swap contracts on the Chicago Mercantile Exchange,Not connected to real BTC. From a trader's point of view, it would be better to approve the Bitcoin Spot ETF from the price track point of view or the price model point of view.

But anyway,For avid blockchain and cryptocurrency supporters, anything that creates a Bitcoin ETF will not dampen their expectations.

* According to the "Notice on Additional Protection and How the Hype on Cryptocurrency Transactions Works" provided by the Central Bank and other entities, the content of this article applies only to the nature of the information and does not endorse or endorse any business or investment. Readers, please follow local rules and get involved in financial crime.