World-leading cryptocurrencies like bitcoin have recovered after falling below $30,000 earlier this year. Despite the repeated warnings from regulators about the risks of investing in such assets.
Bitcoin hit a record high after launching a new exchange-traded fund (ETF) linked to cryptocurrencies. It is believed to be open to a wider class of investors. The price on Wednesday was above $67,000, well above the previous record of just below the $65,000 set in April.
Bitcoin, the world’s leading cryptocurrency, fell to less than $30,000 in the summer amid concerns over Chinese regulations.
More People Own Crypto Assets
Numbers released earlier this year show that 2.3 million UK adults owned crypto assets, including Bitcoin. This is an increase of 400,000 from last year, despite warnings about related risks. The Financial Conduct Authority (FCA) states that consumers should be willing to lose all their money investing in unregulated products. However, Bitcoin is currently profiting from the launch of the first related US ETF. Investors can buy and vend similar finances track means, sectors, or goods, on the stock exchange.
Tuesday was the first day of trading for the ProShares Bitcoin Strategy ETF, and Wednesday’s share price rose 2.6°f. ETFs invest in cryptocurrency-linked futures markets rather than investing directly in Bitcoin.
However, this development is a new class of investors who can buy and sell ETFs on traditional securities accounts.
ProShares chief executive Michael Sapir said in an announcement earlier this week that they believe a multitude of investors has been eagerly awaiting the launch of a bitcoin-linked ETF after years of efforts to launch one.
He added the ETF will open up exposure to bitcoin to a large segment of investors who have a brokerage account.
Bitcoin is an Attractive Asset
These can be stockholders who are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider and creating a bitcoin wallet or are concerned that these providers may be unregulated and subject to security risks, Mr. Sapir said.
Bitcoin works independently of other assets such as stocks and bonds, which makes it attractive to anyone with an investment portfolio. Although the cryptocurrency has a much shorter track record, its role can compare to the role of gold, which it can consider elsewhere in the era of volatility as a store of value.
Others see digital currencies as the future of finance, regardless of government. Although people are not yet widely using them as payment methods.
The energy-intensive mining process in which computers generate Bitcoin has been sharply criticized for its environmental impact. The regulation also poses a threat as China made Bitcoin transactions illegal last month.
In the United States, the chairman of the Securities and Exchange Commission said that cryptocurrencies do not provide sufficient protection for investors.
James Quinn, superintend associate at Hong Kong-based cryptocurrency private wealth manager Q9 Capital, noted that the launch of the new ETF was meaningful for Bitcoin. It could be available to a lot of folks.
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