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Cryptocurrency Officially Hits the NYSE, but Is It Really All That Good?
By Shane Addinall Oct 22, 2021 IndustryBitcoin linked investments are finally here, a long-awaited milestone in the cryptocurrency industry. Proshares offers a new Exchange-Traded Fund (ETF) “Bito” on the New York Stock Exchange, and it’s made impressive rises on its debut on Tuesday.An ETF is a type of security that tracks an index, sector, commodity or other assets but can also be bought or sold on a stock exchange (in the same way a regular stock can).
As an example: Should you invest $500 in S&P 500 ETF you would be indirectly investing $500 in a percentage of a portfolio of stocks such as Apple, Tesla, Microsoft, Google and 500 more associated with the S&P 500. Your money is being invested in underlying assets or rather, stocks.
On the other hand, this Futures ETF (also being called the Bitcoin ETF) doesn’t buy or own any Bitcoin. The name “futures” refers to an ETF that will buy or sell at a predetermined price at a specified time in the future. Your money is being held in collateral accounts, money-market securities and Treasury bills etc, not in Bitcoin physically.
Investors may see this ETF as an advantage as this lets them buy into Bitcoin without actually buying it on a crypto exchange or in the coin directly. Futures-based ETFs are vulnerable and their value will be determined by the divergences in the future price of the underlying assets, in this case - Bitcoin, which is notoriously volatile.
Save or Sell?
Some of you may still be on the fence about whether to invest in cryptocurrencies at all while a recent survey on 1000 Americans reflects how easily investors will indebt themselves just to get their hands on crypto.
Shockingly, nearly 1 in 4 respondents had purchased cryptocurrency with a credit card and 21% of respondents are planning on accumulating debt to buy more crypto in future.
This survey serves as a good guideline to establish your position with cryptocurrencies and what to do with them, save or sell or maybe use your currencies in other creative ways. When deciding on your degree of interest in “Bito” keep in mind that the Bitcoin ETF is a step closer to a direct ownership ETF and would likely have a positive impact on the value of Bitcoin.
“As the cryptocurrency conversation grows in pace and fervour, data-based information becomes more important than ever” this survey suggests. The choice is yours.
Public Perception
Bitcoin has become a household name, as widespread adoption, media hype and public perception keeps reminding us to “buy-in or be left out”. With a Bitcoin-linked ETF now available on the NYSE, the Bitcoin price might just keep its bullish growth, making it wise to start investing in Bitcoin sooner than later.
At the very least, the launch of this futures ETF will nudge those on the fence to finally start with their own crypto portfolio.
Are ETFs For You?
You may not be a crypto enthusiast but cryptocurrencies are here to stay, so it will be wise to make up your mind about Bitcoin or any other cryptos fast. And what about “Bito”? Gather all the facts, listen to the experts and become data-based informed. Mike Hunsberger says that consumers should definitely approach Futures ETF with some scepticism.
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