Bitcoin has surpassed its previous all-time high of $64,888.99 and managed to reach a new peak of near $67,000. The previous all-time high was reached back in April. The sudden surge in price has occurred due to the first bitcoin futures exchange-traded fund debuting on the New York Stock Exchange. Also Read - Indian Govt private cryptocurrency ban: What’s in store for crypto investors
The Securities and Exchange Commission after eight years of rejecting proposed Bitcoin ETFs finally allowed the ProShares Bitcoin Strategy ETF (BITO) to start trading. The ETF attracted the second-most volume on its first day of any ETF. Also Read - Cryptocurrency ban in India: Bitcoin, Ethereum, Tether and other crypto prices fall drastically
Critics are saying that the new ETF holds the Bitcoin futures, which will make it into an imperfect proxy for Bitcoin. Also Read - Indian government looking to ban private cryptocurrencies, will submit Bill soon
The new ETF will encourage traditional advisors and investors to buy Bitcoin for their investment accounts, without having to go to an outside provider.
“This is the beginning of the normalization of digital currency,” said Anthony Denier, the CEO of stock and crypto trading platform Webull. “There’s a lot of excitement in the space, and deservedly so.”
Investors be cautioned
Similar rallies with Bitcoin reaching new heights have seen a huge fall soon after. Bitcoin had grown a lot in market cap in 2017 after the launch of Bitcoin futures, and the market debut of Coinbase Global back in April, but it fell by over 20 percent in a matter of days. Many cautionary investors are claiming that the latest move has started to feel just like those moments.
What is Bitcoin
Bitcoin is a decentralized digital currency without an administrator looking after it. Users can exchange it with each other on the peer-to-peer bitcoin network without the need for intermediaries. All of these transactions are noted in a publically distributed ledger, called a blockchain, which is maintained by people using special computers and as a reward, they are able to get a certain amount of bitcoin, depending on the frequency and transactions. This process is also known as mining, and such people are called miners.