Wall Street opened its doors to its first Bitcoin Trading Fund (BTC) (ETF) on October 19 with the listing of ProShares Bitcoin Strategy (BITO) on the New York Stock Exchange. On the first day, the fund attracted over $ 1 billion in trading volume, while the price of BTC climbed to a new all-time high of $ 67,000.
But the immediate gains didn’t last long as BTC cut some of its profits over the weekend.
Bitcoin has corrected nearly 11% from an all-time high to below $ 60,000 on Saturday, sparking fears about the sell-offs that usually occur following the launch of major cryptocurrencies on Wall Street.
Analysts Demand Broader Bitcoin Correction
Two of these important events have been named by independent market analyst Noney Business: the listing of the first bitcoin futures contract on the Chicago Mercantile Exchange (CME) and the emergence of cryptocurrency trading service Coinbase (COIN) shares on the Nasdaq. …
Wall Street’s remarkable charts have coincided with peaks in bitcoin spot prices. Source: TradingView
Specifically, the Chicago Mercantile Exchange launched its Bitcoin Futures product on December 18, 2017, when Bitcoin surged to a record high of around $ 20,000. But the launch also marked the start of one of Bitcoin’s longest bear cycles, which fell to around $ 3,200 twelve months later.
Likewise, the debut of the popular COIN coin on Wall Street on April 4, 2021 coincided with Bitcoin’s rise to a new all-time high of around $ 65,000 just ten days later. However, the bullish move met with strong sell-offs, which resulted in BTC adjusting to $ 28,800.
As a result, the recent Bitcoin ETF ProShares left Bizniz and several other analysts concerned about the “buy reputation, sell news” adjustment. Analyst Lark Davis, for example, noted that he would “not be surprised” if the price of bitcoin dropped after the launch of the ProShares ETF, as it did after the CME launched Bitcoin Futures.
Dan Moorehead, CEO and Co-Investment Manager of Pantera Capital, also wrote in a newsletter earlier this month that he “might want to clear a few chips off the table” ahead of the Bitcoin ETF launch.
An impressive view of a Bitcoin ETF
Despite the historic downtrend associated with well-known cryptocurrencies on Wall Street, some analysts believe the impressive emergence of Bitcoin ETFs could lead to limited negative moves in the BTC spot market.
Todd Rosenbluth, head of ETF research and equity funds at CFRA, told the Financial Times that ProShares’ $ 1 billion debut is “a sign of pent-up demand” among traditional financial companies seeking a stake in the burgeoning crypto industry.
JPMorgan Chase added that retailers only accounted for 12-15% of BITO’s net revenue in the first two trading days.
Related: Bitcoin Selects the Destiny of $ 60K That Turns a Close Eyes to Bitcoin Traders Weekly
This indicates significant interest in bitcoin ETFs among organizations: open interest in margin-based bitcoin futures has risen 79% YTD, and the CME base has grown from negative in July to over 16% earlier this week.
Bitcoin futures open interest rates across all exchanges. Source: ByBt.com
Noel Acheson, head of market analysis at cryptocurrency trading firm Genesis, noted that the perpetual basis for bitcoin futures trading, an indicator of demand for influence, rose but remained only 13.08% compared to mid-April at 34.6%.
High impact is still a common factor behind the recent bitcoin spot market adjustments. In other words, current neutral funding rates indicate that the likelihood of significant withdrawals is relatively low.