Bitcoin’s price soared beyond the $31,000 threshold on Friday, marking its highest value since June 2022. This significant uptick in Bitcoin’s value was a response to the U.S. Securities and Exchange Commission’s (SEC) sanctioning of the Volatility Shares 2x Bitcoin Strategy ETF, or BITX. This is the inaugural leveraged Bitcoin Futures ETF in the U.S., and its approval follows a wave of bullish sentiment in the crypto market earlier this week, largely driven by BlackRock.
Bitcoin’s price peaked at $31,458 on the Bitstamp crypto exchange, establishing a new high for the year and its highest level since June 2022. At the time of writing, Bitcoin was trading at $30,905, reflecting nearly a 4% increase over the past 24 hours and a remarkable 87% rise year-to-date (YTD).
The Volatility Shares 2x Bitcoin Strategy ETF, which became effective on Friday, June 23, marks a new chapter in crypto investing in the U.S. market. BITX, set to commence trading on Tuesday, June 27, will offer investors exposure to Bitcoin with daily returns. Instead of directly investing in Bitcoin, BITX aims to profit from increases in the price of Bitcoin Futures Contracts, aligning with the CME Bitcoin Futures Daily Roll Index.
The bullish momentum in Bitcoin’s price over the past week has been largely driven by BlackRock’s filing for a spot Bitcoin ETF. Given BlackRock’s high success rate with ETF applications, the market has responded with optimism. The filing by BlackRock has also triggered a wave of spot ETF applications from other Wall Street giants and global financial institutions, suggesting potential major moves in the market.
Despite the positive response from cryptocurrency advocates, the approval of a leveraged futures product before a straightforward spot ETF has raised some eyebrows. Nate Geraci, co-founder of the ETF Institute, described this aspect of the Bitcoin ETF saga as “ridiculous” and “wild.”
Meanwhile, it’s worth noting that $BITO, the first Bitcoin futures ETF in the U.S., has underperformed BTC year-to-date, despite a jump in its USD pair on the recent news. The asset gained 3.45% on the day, reaching $17.57, according to Yahoo Finance, but it’s still down more than 50% from its all-time high of $43.32 in 2021.
