As a seasoned analyst with over two decades of experience in the financial industry, I’ve witnessed the evolution of traditional finance (TradFi) from horse-drawn carriages to electric cars, and now, it seems, we’re on the verge of witnessing the rise of Bitcoin self-driving cars. The recent filings by ProShares for a trio of Bitcoin-linked ETFs are indeed intriguing, particularly the “BTC hedged ETFs” concept.
ProShares, an American issuer of Exchange-Traded Funds (ETF), has taken another step forward to enlarge its range of Bitcoin ETF offerings. The investment firm has submitted applications to list three new Bitcoin-tied ETFs, with conventional stock market products serving as their reserves. These applications arrive at a time when there’s increasing speculation about potential relaxation in U.S. Securities and Exchange Commission (SEC) approvals next year following the appointment of a new Chairman.
ProShares Bitcoin ETF filings
As an analyst, I’ve just received news from Nate Geraci, President of ETF Store, that ProShares has filed three proposals: a S&P 500 Bitcoin ETF, a Nasdaq-100 Bitcoin ETF, and a Gold Bitcoin ETF, in that order.
Nate Geraci states these products are long in the underlying stocks or gold. These would now feature a short USD and long Bitcoin position using Bitcoin Futures offerings. The dual-faced model of these new ETFs made him call the prospective offerings “BTC hedged ETFs.”
These investment funds, proposed by ProShares, are designed to track the S&P 500, Nasdaq-100, and gold markets, but their values will be based on Bitcoin (BTC) instead of traditional fiat currencies like USD. In essence, these ETFs would hold a long position in the underlying assets (stocks or gold), while also having a short USD/long BTC position through BTC futures contracts. I’m referring to them as “Bitcoin-hedged ETFs.” Bitcoin is increasingly making its mark and challenging traditional finance, or tradfi.
— Nate Geraci (@NateGeraci) December 28, 2024
After the U.S. SEC granted approval for Bitcoin and Ethereum ETFs, there’s been no decrease in the influx of filing applications.
As the variety of cryptocurrency ETFs, such as those based on Litecoin, Hedera, Solana, and Ripple, have expanded, financial managers are increasingly refining their strategies to make these investment vehicles align more closely with traditional financial instruments.
Geraci aptly observed that “Bitcoin is starting to eat tradfi.”
Year of crypto Wall Street takeover
The recent submission of this document has sparked discussions among financial analysts about the persistent efforts by ETF creators to expand the popularity of their products. Additionally, alongside its $5,500 Ethereum price prediction from Galaxy Digital, the company has forecasted significant growth in the adoption of ETFs as well.
It’s been pointed out that at least one major investment firm is planning to invest 2% of their managed assets into Bitcoin, highlighting the possibility of this digital currency becoming more widely accepted in the financial sector on Wall Street.
Now, numerous conventional companies have started purchasing Bitcoin via ETFs, which adds to the continuous purchases made by direct buyers such as MicroStrategy.
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2024-12-28 17:13