Bitcoin Futures ETF Launch Announced... Signal for Institutional Adoption

by Hwang Junho

Published 17 Oct.2021 08:00(KST)

Updated 06 Mar.2023 18:57(KST)

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[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hwang Junho] The market is buzzing with news that a Bitcoin exchange-traded fund (ETF) will be launched next week. The market's interest is intense as this marks the first step toward Bitcoin's integration into the institutional framework.

As of 5:43 PM on the 16th, the average Bitcoin price, calculated from major cryptocurrency exchanges trading in US dollars according to CoinMarketCap, was $61,673.18. This represents an increase of about 4.34% compared to 24 hours ago and a 12.89% rise compared to a week ago.

The news that a Bitcoin ETF will pass the US Securities and Exchange Commission (SEC) for the first time in seven years is believed to be causing Bitcoin prices to fluctuate. According to Bloomberg, ProShare and Invesco have applied for Bitcoin futures-based ETF trading, which is expected to be approved this week.

The ETF approved this time is not one that invests in the spot market but rather in futures. Currently, Bitcoin futures are traded on the Chicago Mercantile Exchange (CME), and from the SEC's perspective, this is considered more favorable for investor protection and market stability due to stricter supervision and regulation compared to general private exchanges. However, since it is a futures ETF, its actual impact on the Bitcoin price is expected to be limited.

Haen Dae-hoon, a researcher at SK Securities, analyzed, "Although the impact on the Bitcoin spot price will be limited due to it being a futures ETF, the fact that Bitcoin, which seemed unlikely to be integrated into the institutional framework, is gradually establishing its position will have a positive effect." He added, "Currently, the holdings of Bitcoin and Ethereum on exchanges are continuously decreasing, which signals that ordinary companies or financial institutions are buying," and concluded, "ultimately, a spot ETF is just a matter of time."