Bitcoin Blows Past $64K amid Excitement Over Futures ETF Debut

20 Oct 2021 · 3rd Party Analysis

Vector Wallet with circuits, symbol for crypto wallet with Bitcoin logo, both over a candlechart background. Bitcoin Blows Past $64K amid Excitement Over Futures ETF Debut


In Summary:

  • Bitcoin price surges above $64,000 and trades about 2% from its all-time high
  • ProShares’ Bitcoin Strategy ETF successfully makes its entrance in traditional markets

What’s Driving the Markets Today?

Bitcoin, the largest cryptocurrency in the market, almost reached its all-time high on Tuesday. Driven by an increased appetite from investors, the original coin surged to a session high of $64,450. In other words, just about $400, or 0.6%, from its record of $64,800 set on April 14.

The largest contributor to the massive gains on Tuesday was the newest addition to Wall Street – Bitcoin’s first ETF. In more detail, Bitcoin Strategy ETF, an exchange-traded fund provided by ProShares, made its debut on the stock market.

Traders and investors from both the crypto space and traditional finance cheered the launch. Moreover, the Bitcoin ETF gained roughly 5% on its first day of trading. The milestone was hailed by ProShares CEO, Michael Sapir.

“1993 is remembered for the first equity ETF, 2002 for the first bond ETF, and 2004 for the first gold ETF. 2021 will be remembered for the first cryptocurrency-linked ETF,” Mr. Sapir said.

What’s a Bitcoin Futures ETF?

While the market is still digesting the news, it’s important to know what’s behind the rally. A Bitcoin ETF was first filed for approval by the Securities and Exchange Commission in 2013. Finally, after years of waiting and dozens of applications rejected, US regulators gave the green light to ProShares’ Bitcoin ETF.

However, traders should know the ETF will not hold bitcoin itself. Rather, it will offer shares of contracts tied to the future price of bitcoin, or bitcoin futures. While it enables access to bitcoin’s price, investors will not be buying the underlying crypto asset.

That being said, analysts say the achievement is only the first step of many toward broader cryptocurrency adoption. Even this week, financial watchdogs in the US will review a few more Bitcoin ETF applications. “This is an exciting step but not the last,” said Douglas Yones, head of the ETF division at the NYSE.

Dive Deeper in the Financial World

Meanwhile, in stocks and currency pairs, equities on Wall Street advanced on Tuesday. The Dow Jones Industrial Average gained 0.5%. Furthermore, the S&P500 and the Nasdaq Composite each added about 0.7%.

Investor confidence received a boost with the stronger-than-expected earnings reports. On that front, Netflix’s financial results for the third quarter surpassed analyst estimates.

The streaming giant posted a solid beat on earnings figures and new subscribers added. More precisely, Netflix added 4.4 million subscribers for the quarter ended September. In the meantime, earnings per share landed at $3.19 vs the $2.56 forecast.

Over to forex, the Japanese yen is among the top decliners this week. The USD/JPY, for example, is trading at a three-year top near 114.70. In addition, the GBP/JPY is now at a five-year peak above 158.00. The AUD/JPY pair is also at a multi-year high above 85.80.

What to Expect in the Markets?

Inflation data today is coming from the UK, the European Union, and Canada. The figures are likely to increase the volatility in the currency market. Particularly vulnerable could be pairs linked to the British pound, the euro, and the Canadian dollar.

Economic News Today (EST time)

At 02:00 am, the UK reveals its CPI data for September. Next, at 05:00 am, the eurozone will report its CPI, also for September. And at 08:30 am, Canada published its Core CPI data (excluding food and energy) for September.

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