Wall Street listed ProShares Bitcoin Strategy on the New York Stock Exchange after opening its doors to Bitcoin exchange-traded funds on October 19. The fund had gained plenty of attention from traders as it saw more than $1 billion in volumes on its first day, while the price of Bitcoin was being rallied to a new all-time high of $67k.
Though the gains did not last long after gains entered the weekend. The price of Bitcoin corrected by 11% from its all-time high record of $67k, dropping under $60k on Saturday. Bitcoin’s price correction sparked fears about a selloff regarding the launch of major crypto derivatives products on Wall Street.
The recent downside was expected by analysts earlier regarding the debut of Bitcoin ETFs, while the funds have been under bearish sentiment from high-profile Wall Street crypto listings.
Todd Rosenbluth, the head of ETF and CFRA, mutual fund research, had stated that ProShare’s$1 billion ETF debut is a sign of stifled demand among traditional financial companies that are looking to gain slight exposure to the surging crypto industry.
According to JPMorgan Chase, retail traders accounted for 12% to 15% of the net inflows into the fund on the first two days of trading. Noelle Acheson, the head of market insights at Genesis, stated that bitcoin’s perpetual futures rolling basis is ticked up, but maintained only 13.08% compared to April’s 34.6%.
ProShar’es Bitcoin ETF move has made many analysts worried about the potential “buy the rumour, sell the news” correction. Independent market analysts recalled two major events on Twitter regarding the current situation in the market. Namely, the listing of Bitcoin futures on the Chicago Mercantile Exchange, and the debut of the biggest crypto trading service Coinbase’s stock on the Nasdaq stock exchange.
On December 18, 2017, CME launched its Bitcoin futures product which rallied an all-time high of $20k at the time. Though the launch was marked the start of the longest bear cycles in bitcoin’s history with prices bottoming at $3k.
The debut of Coinbase’s stock on April 4, 2021, coincided with the price rally to a new all-time high of $65k. The upside move saw a bout of selloffs and the price of Bitcoin corrected to $28k. Analysts like Lark Davis stated it would be unsurprising if Bitcoin crashes after the fund’s launch.
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