Crypto adoption has reached a major milestone.
The first crypto-linked exchange-traded fund (ETF) has arrived in the U.S. market.
This is a BIG deal. Much bigger than people realize.
On October 20, the ProShares Bitcoin Strategy ETF (NYSE: BITO) opened for trading.
It saw over $1 billion in volume on the first day.
That makes BITO’s debut the second-most actively traded ETF launch in history.
Investors clearly want exposure to crypto.
The price of bitcoin rallied over 60% ahead of the event. And it wasn’t just bitcoin…
The crypto market hit a new all-time high on launch day, surpassing $2.6 trillion.
Although BITO is good for the crypto market, DON’T BUY IT.
Here’s why.
Stay Away From BITO
For starters, BITO doesn’t even invest in bitcoin…
Rather, it invests in futures that track the price of bitcoin.
Futures ETFs hold contracts that are close to expiration.
As the contracts are set to expire, the ETF manager must sell them and buy new contracts.
And in the case of bitcoin futures, the new contracts are more expensive.
Since the ETF repeatedly does this, its return will likely lag bitcoin’s return.
In that case, it’s smarter to buy bitcoin through an exchange like Coinbase or Binance.
A Development Nonetheless
I’m not a fan of BITO. But its arrival on the New York Stock Exchange indicates something important…
Regulators are open to crypto ETFs.
I expect BITO will be the first of many crypto-linked ETFs.
An ETF that buys bitcoin directly is likely not far off.
And after that, Ethereum and other crypto ETFs will follow.
When that happens, ETF managers will be in a buying frenzy.
New money will create massive demand and higher prices for cryptos.
Here are two more reasons why crypto ETFs are a game-changer.
1. New Investors Are Coming
Certain investors can’t get exposure to cryptos.
And some institutions still can’t buy crypto directly.
But restrictions on ETFs are generally much more relaxed.
This opens the door for new investors to gain exposure to crypto.
2. ETF Managers Are Forced to Buy
ETFs are generally passive investing vehicles that track an investment or group of investments.
When more money comes into the ETF, the fund manager has to buy more of whatever the fund tracks.
This forced buying creates momentum.
Researchers have found that for every $1 that goes into an ETF, the value of the fund’s investments increases by $4.
This sends prices higher FAST.
Now Is the Time to Buy Bitcoin and Other Cryptos
With new developments emerging every day, now is the time to buy cryptos.
You want to buy before new ETFs launch, not afterward.
Fortunately, Ian King’s Next Wave Crypto Fortunes service is here to help you.
And in a new presentation, Ian shows you how to potentially make 12 times your money in 12 months.
You can watch it now by clicking here.
Regards,
Research Analyst, Strategic Fortunes
Morning Movers
From open till noon Eastern time.
Ocugen Inc. (Nasdaq: OCGN) normally develops gene therapies to cure various forms of blindness. However, it has recently been working with Indian company Bharat Biotech to help it develop its COVID-19 vaccine, Covaxin. It is up 23% today on investor anticipation that Covaxin will soon receive Emergency Use Listing from the World Health Organization.
Medpace Holdings Inc. (Nasdaq: MEDP), provides clinical research-based drug and medical device development services. It is up 13% this morning after reporting results for Q3 that topped both earnings and revenue estimates.
Valneva SE (Nasdaq: VALN) is a French specialty vaccine maker that is up 11% after reporting positive trial data from a Phase 3 study of its COVID-19 vaccine comparing its effects to AstraZeneca’s vaccine.
Marqeta Inc. (Nasdaq: MQ) operates a cloud-based platform that delivers card issuing and transaction processing services to developers. It is up 10% this morning after Uber Freight announced it will use Marqeta’s technology to process payments for its carrier customers.
Arqit Quantum Inc. (Nasdaq: ARQQ), a quantum encryption technology company, is back on the list for a second day in a row on more volatility and no real news. It is up 10% as of this morning.
Nel ASA (OTC: NLLSF) delivers various solutions to produce, store and distribute hydrogen from renewable energy. It is up 9% on the news of a purchase order for equipment from an undisclosed, leading stationary fuel cell manufacturer. The purchase order has a value of approximately $2.6 million.
Crane Co. (NYSE: CR) designs and manufactures industrial products ranging from construction products to aerospace and electronics equipment. It is up 8% after reporting Q3 results that beat earnings and revenue estimates.
Galaxy Digital Holdings Ltd. (OTC: BRPHF) is a cryptocurrency-based asset management company that is up 9% on investor excitement after it announced a date for its Q3 earnings release.
Novonix Ltd. (OTC: NVNXF) develops and supplies battery materials, equipment and services to the lithium-ion battery market. It has no real news to report, but it is up 7% thanks to the general uptrend in lithium prices and other lithium stocks.
Inter Parfums Inc. (Nasdaq: IPAR) manufactures, markets and distributes a range of fragrances and fragrance-related products. It is up 7% this morning after raising its outlook for the rest of the year thanks to record sales in Q3.
