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US Bitcoin ETF, All Time Highs and Weekly News!

Ether Capital Newsletter
Ether Capital Newsletter
This week was all about the Bitcoin ETF on Wall Street.
The ProShares Bitcoin Strategy ETF ($BITO) made its debut on the New York Stock Exchange to great fanfare. And it delivered on the hype, topping US$1 billion in trading volume in its first two days.
Amid the ETF excitement, Bitcoin hit a new all-time high of more than US$67,000, taking the total crypto ecosystem to an impressive US$2.7 trillion in market value.
While this metric shows robust investor demand for the ETF, you might be wondering… futures contracts? Doesn’t the ETF just hold Bitcoin?
Canada vs. the U.S. - Different Approaches
Many of our readers are aware that Canada was the first jurisdiction in the world to approve a Bitcoin ETF. We wrote about it back in February. (Full disclosure: Ether Capital assisted Purpose Investments in the launch).
The difference between the Canadian ETF and the U.S. one is that the Canadian one is physically settled. That is, the fund itself owns the Bitcoin.
The ProShares ETF in the U.S. does not invest directly in bitcoin and instead uses cash-settled futures contracts to gain exposure to bitcoin returns.
Joe Orsini at Eaglebrook Advisors had an insightful tweetstorm on the perils of a futures-based Bitcoin ETF, using USO (a crude oil ETF) as an example:
He explains that as a result of the futures curve, “roll return” costs can mean that a futures ETF can massively underperform a commodity’s spot price.
He concludes that direct ownership is the way to go from a long-term investing perspective, validating the Canadian ETF approach.
Meanwhile, this crypto journalist doesn’t mince words:
Bottom line: It’s better – and cheaper – to own the asset directly.
ETH Going For a Record
Enough about Bitcoin.
Here’s some other news that caught our attention this week.
The Flippening theory is coming into full effect – Ether has been riding Bitcoin’s wave of success and is approaching all-time highs.
Ethereum’s native token reached more than US$4,200 earlier this week and is set for a potential breakout. One analyst predicts it could hit US$10,000.
While many people were busy obsessing over $BITO, we perked up when we heard the possibility an ETH ETF in the U.S. is on the horizon. QCP Capital – a trading firm based in Singapore – tweeted “long-term attention seems to be shifting from BTC to ETH with potential ETH ETF release after BTC, coupled with ETH V2 catalyst.”
We’re keeping our eye on this!
Ether Capital in the News
  • EthCap CEO Brian Mosoff spoke with BNN Bloomberg about why crypto is here to stay and the importance of investor access.
  • EthCap CFO Stefan Coolican spoke with CoinDesk on the implications of an Ether ETF approval in the U.S.
Newsworthy Links and Highlights:
NFTs have become popular topics of conversation, but do people really know what they are? This piece explains why they’re more than just JPEGs.
Robinhood’s digital wallet will allow clients to trade, buy and sell crypto but also move them in and out of the Robinhood app.
The Associated Press announced it’s teaming up with Chainlink to help bring economic, sports, and race call data into a blockchain framework.
The Economist explains why it’s selling the cover page of its issue on decentralized finance (DeFi) as an NFT. We had previously written on this.
As always, feel free to contact us at info@ethcap.co with any comments or questions or just to say hello.
Thanks for reading - until next week!
Ether Capital (NEO:ETHC) is an Ethereum ecosystem investor based in Toronto, Canada. Ether Capital selectively invests in projects, protocols and businesses that leverage the Ethereum ecosystem and Web 3 technologies. For more information, visit www.ethcap.co.
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