October 21, (THEWILL) – The price of bitcoin hit record highs today Thursday after the launch of the first ever bitcoin futures exchange-traded fund in the US overnight.
Bitcoin is now trading just below $66,500, significantly ahead of its previous all-time high of $64,800 reached in April and more than double its level in July. In pound sterling terms, bitcoin is now trading at around £48,170.
The ProShares Bitcoin Strategy ETF, touted by some as a major milestone for the cryptocurrency industry, is trading under the ‘BITO’ ticker on Wall Street and jumped nearly 5 per cent to $41.94 in its first session.
Unlike mutual funds, which are traded once a day, ETFs can be exchanged throughout the day’s trading session, potentially making them a more popular option for some everyday investors.
As with anything linked to crypto, however, there has been a mixed reaction among experts to the launch of the US bitcoin futures ETF.
Andrey Dobrynin, co-founder and managing director of InvestEngine, said that while the chance to buy into bitcoin futures would ‘undoubtedly turn the heads of many investors’, the potential risks involved still needed to be carefully evaluated.
Mr Dobrynin said: ‘As with all investments – investors should invest at a level or knowledge and risk that they are comfortable with.
‘Whilst ETFs traditionally provide excellent diversification and convenient access to markets – there are always things to consider such as the track record of product providers, replication methods and, in this case, the performance of the underlying futures contracts.
“Bitcoin ETFs are essentially trading something that mimics bitcoin but without trading the actual coin itself.”
Without forgetting the fact that bitcoin remains largely an unregulated asset class which is still establishing itself in its use.’
He added: ‘We’d urge investors to carefully consider whether this investment is suitable for them and for investment platforms to provide the tools and education that support their investors in making informed investment decisions.’
Jodie Gunzberg, managing director of CoinDesk told This is Money: ‘Many will think they are getting bitcoin but they are not.
‘The problem is they are getting futures, which are contracts that expire so, to stay invested, investors need to sell expiring contracts for later-dated ones. If the price of bitcoin is expected to rise in the future, then the later-dated contracts are more expensive.
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