The first bitcoin-focused exchange-traded fund rose modestly in its debut Tuesday.

The ProShares Bitcoin Strategy ETF was up 2% in midmorning trading, at $40.89.

The launch is being closely watched on Wall Street, where finding a way to sell securities linked to bitcoin has been a priority for many firms. Bethesda, Md.-based ProShares rang the bell at the New York Stock Exchange Tuesday to celebrate the launch of its ETF, which goes by the ticker BITO and holds bitcoin futures contracts rather than the cryptocurrency.

“There are a multitude of investors who have brokerage accounts and are comfortable buying stocks and ETFs,” said ProShares Chief Executive Michael Sapir in an interview. “We think this will appeal to them.”

Other asset managers are expected to launch similar funds, including Valkyrie Investments, VanEck and others. But one of the biggest global asset management firms, Invesco, on Monday put its bitcoin futures ETF on hold.

“We have determined not to pursue the launch of a Bitcoin futures ETF in the immediate near term,” an Invesco spokeswoman said in a statement. The firm said it is committed to working with its partner, Galaxy Digital Holdings, on an ETF that holds crypto rather than futures.

Invesco didn’t elaborate on the decision.

Thomas Lee, a managing partner at research firm Fundstrat Advisors, said the ProShares ETF will enable more individuals to invest in bitcoin. He said assets in the fund could rise to as much as $50 billion from $20 million today.

“This will drive higher asset prices via network effects,” Mr. Lee said. He said bitcoin could rise to $168,000 from a recent $62,400.

Bitcoin has climbed 45% since September, reflecting in part purchases driven by the prospective launch of the ProShares ETF and rivals.

The ETF came online following an eight-year effort by asset managers to create funds that hold actual bitcoins. The Securities and Exchange Commission, which hasn’t supported that approach due to concerns that bitcoin trading isn’t transparent enough to protect investors from fraud and manipulation, instead steered asset managers toward the creation of a bitcoin futures product.

Unlike digital currencies, futures trade on regulated venues such as the Chicago Mercantile Exchange. But futures-based ETFs are sometimes hampered by discrepancies between the futures market and the underlying assets they track.

This story has been published from a wire agency feed without modifications to the text

 

 

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