Bitcoin's drive into mainstream finance has reached another major landmark – and another record price. The cryptocurrency was trading at USD 66,975 following the launch of an ExchangeTraded Fund (ETF) in the United State which has dramatically increased bitcoin’s exposure to investors.
The fund, which opened on October 19, permits investors to guess the future value of bitcoin – without actually owning it. It is the first time investors have been able to trade an asset related to bitcoin on the New York Stock Exchange and was preceded by much media attention and hype in financial markets.
It started trading at USD 40 a share and finished the day up 5% with some USD 570 million of assets, making it the second most heavily traded new ETF on record (the first was set up by BlackRock, the world’s biggest asset management company). The impact on the price of bitcoin has been astonishing. It soared past its all-time high of USD 64,895 to the new record of USD 66,975 and at the time of writing, was hovering around USD 65,000. This is a big change from mid-July 2021 when bitcoin hit a 2021 low of under USD 30,000, reflecting its huge volatility.
Many financial institutions have previously tried to get approval for bitcoin exchange-traded funds without success. Until now, the Securities and Exchange Commission has been reluctant to approve any. This was partly due to the intense volatility of bitcoin, as well as broader concerns about the unregulated industry of cryptocurrencies.