Hot demand for bitcoin ETF as ‘Wild West’ meets Wall St

**Wall Street threw open its doors to the crypto industry this week as the first US exchange traded bitcoin fund attracted more than $1bn of investor cash and sent the price of the biggest digital currencies to new highs.

Similar vehicles already trade elsewhere, but the launch of a crypto ETF on the world’s biggest equities market represents a significant milestone for crypto advocates after eight years of lobbying regulators.

For the first time, mainstream investors can now hold a US-listed bitcoin-linked security in their portfolios alongside traditional financial assets like stocks and bonds.

“This is the fastest ETF to get to $1bn in assets . . . From an asset growth and trading volume perspective this is unprecedented and is a sign of the pent-up demand,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA.

The well-received debut of the bitcoin ETF shows how traditional financial companies are racing to snag a slice of the digital asset industry. It also highlights the acknowledgment among many financial watchdogs that the sector has become too large and is growing too fast to brush off.

Retail investors accounted for only around 12-15 per cent of net buying in the ProShares ETF on the first two days of trading, pointing to significant interest among institutions, according to data from JPMorgan. Another similar vehicle sponsored by Valkyrie Funds launched on Friday, three days after the ProShares product, in a move analysts expect to be replicated many times over.

Other announcements this week, including a blockbuster fundraising round by crypto exchange FTX backed by a clutch of blue-chip investors, have added to the hype surrounding digital assets.

These signs of broadening interest, as well as a rise in professional traders using crypto as a base for sophisticated market bets, helped propel the price of bitcoin above $66,000 on Wednesday for the first time before receding to about $61,000 by Friday. Shares in Coinbase, the biggest listed exchange, soared more than 10 per cent in the days leading up to the launch.

However, many analysts say the launch of the ProShares ETF is just the start of a much longer battle to convince the Securities and Exchange Commission that a product providing a direct hook-up to largely unregulated crypto markets should trade on Wall Street bourses.

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