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ProShares Bitcoin Futures ETF to debut on NYSE

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Yahoo Finance's Jennifer Schonberger breaks down what to know about the Bitcoin futures ETF set to trade on the NYSE.

Video Transcript


ADAM SHAPIRO: All right, when we talk about cryptocurrencies and Bitcoin get ready for all of it to grow exponentially because here come the ETFs. Jen Schonberger, this isn't specifically for the cryptocurrencies but for the futures but it's the beginning, isn't it?

JENNIFER SCHONBERGER: That's right, let the parade begin, Adam. The SEC is going to allow the first Bitcoin futures ETF to proceed. It is ProShares Bitcoin strategy ETF. It will begin trading tomorrow on the New York Stock Exchange under the ticker BITO.

Among other fund managers who are looking to get approval as well include Valkyrie Bitcoin strategy ETF, VanEck, Invesco, Galaxy Digital, and of course, Bitcoin bull Cathie Wood's 21 Ark Shares. Meanwhile, we've also learned that Grayscale, well, the digital currency manager, has asked the SEC to convert its flagship Grayscale Bitcoin Trust into a spot Bitcoin ETF. As you mentioned at the top, Adam, the SEC is comfortable with letting Bitcoin futures ETFs proceed forth.

The question mark is now whether this opens the door for Gary Gensler to OK ETFs than invest in the actual digital coin. In the past he said no this could lead to market manipulation. And those who do have applications in with the SEC now have been alerted that they have been delayed. So the jury remains out on that for now.

But this of course, a huge milestone for Bitcoin and the crypto world. You're seeing it pushed the price of Bitcoin above 61,000 on the session today. It could usher in a whole new class of investors who haven't had access to this asset class in the past. Though, BTIG analyst Palmer cautions that these new ETFs could be used as trading vehicles by hedge funds, which could lead to greater volatility and may not be the best choice for a long-term investment. Adam.

- Jen, just real quick I guess how big of a-- how significant of a regulatory feed is this? Because we've been talking about Bitcoin ETFs now for quite some time, lots of questions about what regulations would potentially look like in this space. So from your perspective, I guess, how big of a step is this in the right direction well, a lot of people would say is in the right direction for those who do want to invest in crypto?

JENNIFER SCHONBERGER: Yeah sure, I mean, this is a big step we go back to 2013 when the Winklevoss twins first put in their application for a Bitcoin ETF and it was denied. And we've seen numerous others attempt as well. So it's been years and Gary Gensler finally got his head around, OK, we can do Bitcoin futures, which is basically investing in derivatives that are tied to Bitcoin.

This is not the actual coin itself, digital coin I should say. So we need to make that distinction. And he has said that it is OK to let this move forward under the strict 1940 mutual fund law as opposed to the 1933 law which governs most other ETFs, which isn't as stringent, he thinks it offers more investor protection.

So again, we'll look to see how these new futures ETFs trade and whether it opens the door for other products. And of course, as you mentioned, we are waiting for other regulation in the crypto space. Notably, we're waiting on the PWG report out on a proposal for stablecoins as well as the Federal Reserve's white paper on the pros and cons of a central bank digital currency.