1. Market Wrap: ProShares Bitcoin Strategy ETF Rises in Trading Debut, Sending BTC Higher
Bitcoin hits a six-month high as the first bitcoin futures ETF to list in the U.S. completes its initial day on the market.
Bitcoin rose to a six-month high at around $63,000 as the ProShares Bitcoin Strategy ETF (NYSE: BITO), the first bitcoin-related exchange-traded fund to trade in the U.S., made its debut on Tuesday.
BITO ended the trading day up 4.65% at near $41.80 per share. As of 4:02 p.m. ET, shortly after the close of U.S. stock markets on Monday, the ETF’s trading volume had reached 23.9 million shares, worth more than $1 billion based on the closing price, ranking the investment vehicle as one of the top ETF launches in history.
Dave Nadig, director of research at ETF Trends, tweeted that trading in BITO appeared “orderly” and “stable” in the early moments after the ETF went live.
BITO is structured to invest in bitcoin futures contracts traded on the Chicago Mercantile Exchange, rather than investing in the cryptocurrency directly, which is one reason why some analysts don’t expect the fund to have a significant impact on BTC’s spot price.
“We do not expect the introduction of futures ETFs to drive a price impact as significant as we would see from a pure spot Bitcoin ETF vehicle,” Christopher Brendler, managing director at asset management firm D.A. Davidson told.
Brendler also mentioned that contango can cause losses for some investors in commodity ETFs that use futures contracts. Contango occurs when the futures price of a commodity is higher than the spot price. “But these losses can be avoided by buying ETFs that hold actual commodities,” Brendler wrote.
Bitcoin (BTC): $64,016, +4.42%
Ether (ETH): $3,810, +1.98%
S&P 500: $4,519, +0.74%
Gold: $1,769, +0.33%
10-year Treasury yield closed at 1.63%
Bullish price action
In the spot market, BTC was well bid, rising about 3% over the past 24 hours. Buyers remained active after quickly absorbing a large sell order on crypto exchange OKEx during Asian daytime trading hours on Tuesday.
And price action suggests bitcoin may be approaching another bullish rally.
BTC recorded its highest weekly close on record last week, topping the $61,500 weekly close on April 6, according to crypto research firm Delphi Digital. “Last week was one of the most decisive uptrends since Jan. 2021,” the firm wrote in a blog post.
2. Hong Kong Crypto Exchange OSL Launches Operations in Latin America
The exchange is looking to address growing demand among institutional investors.
OSL, a Hong Kong-based digital asset trading platform, has started offering its exchange services to professional and institutional investors in Argentina, Brazil, Colombia and México, the company said in a statement on Tuesday.
The company, part of BC Group, a public technology and digital asset company, will provide institutional customers with “access to a global liquidity pool,” the company said.
Fernando Martinez, OSL’s head of Americas, told that the company was addressing the growing demand for crypto services among institutional investors in Latin America and will serve regional funds, family offices and private banks.
“Until the end of the year, we have removed fees for professional investors and institutions that want to start interacting with our exchange,” Martinez said, adding that the exchange does not operate with local currencies but directly with U.S. dollars.
In recent months, large financial services firms in the region have launched of a number of new investment products. In June, blockchain investment firm QR Capital started trading its bitcoin exchange-traded fund (ETF) on the Brazil stock exchange. A month later, the firm listed an ether ETF on the same exchange after winning approval from regulators.
Earlier this month, the Mexican Stock Exchange (BMV) announced that it is considering listing crypto futures on its derivatives exchange.
Martinez said that OSL, the first and only digital asset company licensed by Hong Kong’s Securities and Futures Commission, would compete against regional platforms that are currently providing similar services.
OSL primarily offers brokerage and exchange services, and to a lesser extent, custodial services, Martinez said. He believes that institutional crypto investment flow will soon equal retail investment flow in Latin America.
3. Chinese E-commerce Giant JD.com Reveals NFTs
JD Technology is offering free NFTs to people who sign up for its conference.
JD.com’s tech arm revealed its non-fungible token technology and plans, following in the heels of its rival Alibaba.
JD Technology is offering seven free limited edition NFTs built on its own NFT chain, commemorating its annual conference, JD Discovery, according to a WeChat post on its official account.
The NFTs, JD’s first, are minted and released on JD Technology’s own blockchan, dubbed JD Chain. The company has developed “an NFT technical service platform” on which users can store, verify, circulate, and trace NFT collections.
In August, Tencent and Alibaba launched their own NFT platforms.
The seven NFTs feature JD.com’s mascot, each representing one of the company’s key sectors; retail, tech, logistics, health, finance, and smart cities.
One NFT will be given for free to anyone who signs up for the company’s Discovery conference between Oct. 19 and Nov. 22. If they invite more people to attend, they can collect more NFTs to form the full set.
The seven NFTs will not be released after Nov. 22, but users will be able to transfer them to others.
JD plans to apply its NFT platform on copyright protection, public welfare, art collection, and e-commerce, according to the post.
JD Technology, formerly JD Digits, is the tech development arm of JD.com, one of China’s biggest e-commerce apps. JD Technology works on blockchain, fintech, AI, healthtech, and cloud services.
4. Facebook’s Novi Taps Paxos, Coinbase Ahead of Diem Rollout
Coinbase will provide custody services, while Paxos is supplying the stablecoin Novi will use.
Facebook’s Novi wallet is ready to launch — but it won’t be launching with the Diem (formerly Libra) stablecoin.
Novi, Facebook’s digital wallet subsidiary, will go live in the U.S. and Guatemala in a pilot program, allowing users to start trading the Paxos Dollar (USDP), the social media giant announced Tuesday. Crypto exchange Coinbase will provide custody services for the program.
Users can purchase USDP through Novi, and Novi will deposit the funds with Coinbase, according to a Coinbase blog post.
“This does not mean our support for Diem has changed,” the Facebook press release said. “We intend to launch Novi with Diem once it receives regulatory approval and goes live.”
The pilot has already gone live, but is being rolled out slowly on the Apple App Store and Google Play Store, Facebook said.
Facebook originally announced Novi alongside Diem in June 2019. At the time, the wallet, then known as Calibra, was intended to support the then-Libra stablecoin before regulatory backlash changed the scope of the project.
5. ProShares Bitcoin Futures ETF ‘BITO’ Hauls In $570M of Assets in Stock-Market Debut
According to ProShares, the fund’s sponsor, the new ETF’s assets shot to $570 million from $20 million on its first day of trading.
The first-ever exchange-traded fund (ETF) backed by bitcoin futures hauled in some $570 million of assets on its first day of trading, a sign of just how hungry investors remain for bets on the cryptocurrency as prices approach a record high.
ProShares, the fund’s sponsor, announced the level of assets in an emailed notice from a press representative. The ProShares Bitcoin Strategy Fund, which launched Tuesday on the New York Stock Exchange under the ticker BITO, had $20 million of seed capital at the start of the day.
The fund also saw about $1 billion of trading volume on the first day, ProShares said. That made it the second-most heavily traded new ETF on record, the firm said, citing Bloomberg.
The fund’s price rose to $41.94 at the close of stock-market trading, up 4.9% from the initial $40 net asset value.
Dave Nadig, chief investment officer and director of research of ETF Trends, said that much of Tuesday’s trading volume appeared to come from retail investors, since there were few large “block” trades of the size that big institutional traders often deal in.
“This is probably going to be what we all expected, which is it’s an access vehicle for certain players in the marketplace,” Nadig said in a phone interview. “There’s lots of folks who are active participants in the markets who just don’t want to cross over the crypto bridge by themselves.”
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October 20, 2021