October 21, 2021,
12:01

0

The value of bitcoin has risen by more than 7% on the day, breaking past all-time highs. On the evening of October 20, the peak price for one coin was $ 66,815, although at the time of writing the material, the rate had retraced slightly, and amounted to $ 64,819.

As noted by Yahoo Finance, the main driver of such a sharp jump in the rate was the launch of the first exchange-traded investment fund (ETF) on bitcoin ProShares Bitcoin Strategy ETF and the expectation of the nearest transformation of the world’s largest bitcoin fund Grayscale Bitcoin Trust into an ETF.


What is ETF and why the launch of the fund influenced the course

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Bitcoin coin with ETF text on stone background, Concept Entering the Digital Money Fund. ETF and Bitcoin cryptocurrency concept

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ETF is an Exchange Traded Fund or “Exchange Traded Fund”. As part of the ETF, the manager collects shares of various companies or assets in the form of cryptocurrencies, as is the case with the Bitcoin ETF, and makes a fund on their basis. At the same time, the shares of the fund itself also begin to be traded on the stock exchange, and anyone can purchase them, becoming in fact a co-owner of all the assets in which the fund has invested.

As noted by MarketWatch, cryptocurrency companies have been trying to get approval from the US Securities and Exchange Commission (SEC) to create a Bitcoin ETF before (since 2013). But the commission rejected their applications each time, citing the volatility of the cryptocurrency market. But this time, the regulator still approved the launch of the fund.

The launch of the first Bitcoin ETF, the ProShares Bitcoin Strategy ETF, which is already listed on the New York Stock Exchange under the ticker BITO, has already created a new way for investors to access BTC – through brokerage accounts. And in conjunction with the expectation of the nearest transformation of the world’s largest bitcoin fund Grayscale Bitcoin Trust into an ETF, this has seriously spurred the rate of cryptocurrencies.

Bitcoin exchange rate hits records against the background of the launch

Chart: Investing.com

During the October 20 bidding for BITO options on the NYSE Arca Options and NYSE American Options platforms, the bitcoin price reached a new all-time high. The peak price for one coin was $ 66,815, after which it slightly adjusted – at the time of this writing, the rate is $ 64,819.

Chart: Investing.com

Following bitcoin, the rates of other cryptocurrencies also increased. If on the day of October 20 Ethereum traded at a price of about $ 3850 per coin, then on the night of 21 the price was $ 4320. True, Ethereum did not set any records, and a little later, like Bitcoin, it rolled back the course a little – now the price is $ 4144.

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