bitcoin continued its relentless rise, surpassing $89,500 for the first time, fueled by President-elect Donald Trump’s embrace of digital assets and the prospect of a Congress with pro-crypto lawmakers.
Trump’s victory in the presidential election has sparked celebrations in the digital asset industry, which invested more than $100 million in support of various pro-cryptocurrency candidates. The largest token has risen around 32% since the US elections on November 5, reaching an all-time high of US$89,599 this morning, according to Bloomberg.
Bitcoin has added $1 trillion in the last 12 months: Bitcoin’s market cap is now officially larger than the market cap of silver, at $1.736 trillion. The cryptocurrency market is now worth more than $3 trillion for the first time in history.
“The reason for Bitcoin’s strong run is because of Trump’s announced victory as president of the United States. Trump had been speaking in his campaign in favor of cryptocurrency and it is expected that he will have much more lax regulation for the crypto world,” Jorge Ramos, general manager of BBVA Bolsa, told Perú21.
“The same has been replicated in the ETFs that bet on this cryptocurrency,” he added.
Bitcoin ETF
BlackRock Inc.’s Bitcoin Wall Street spot exchange-traded fund has surpassed the size of its gold fund, amid record demand for ETFs investing in the original cryptocurrency.
Since the end of summer of this year, three North American investment funds that invest in bitcoin and whose profits or losses replicate the behavior of the cryptocurrency (ETF) began trading on the Lima Stock Exchange (BVL): IBIT, from iShares Bitcoin Trust; HODL, from VanEck Bitcoin Trust; and BTCO, from Invesco Galaxy Bitcoin.
Yesterday, the IBIT was the second most profitable foreign security on the BVL, after ending with a rise of 13.04%, to US$49.51. Furthermore, since November 5, its value has risen by 24.4%. That is, in just one week.
Regarding the other two ETFs, in the case of HODL there are no movements, while the last movement of BTCO was in July, when it closed at US$67.
Thus so far this year, BTCO loses 0.59%, while IBIT returns 69.44%.
“The good thing about these ETFs is that they really replicate the behavior of Bitcoin. In addition, you can have the volatility and the same performance of bitcoin through a vehicle authorized by the SEC, which is the SMV of the United States,” said Ramos.
He explained that the ETF as such is a safe investment vehicle to invest in, because it is done through a regulated entity such as the local stock exchange, unlike other ways of purchasing cryptocurrencies in unregulated markets and platforms.
“Several of these unregulated platforms have even been fraudulent,” he said.
However, he indicated that this security does not mean that bitcoin will always win, because it will depend on the movement of this currency.
So far this year, bitcoin has risen 100%, but ETFs in Peru have risen less because they began trading on different dates in the Lima stock market.
“We have many investors participating in these assets. Before it was very risky to buy these crypto assets and now that they have been activated, not only have they had record income from investors in the US, but here in Peru there are many investors who are entering through these ETFs,” Ramos indicated.
More Crypto ETFs Could Be Listed
Ramos, who is also president of the Association of Stock Broker Companies of Peru (ASAB PERÚ), said that ETHA, of the iShares Ethereum Trust, recently began trading. The ETF replicates the behavior of the Ethereum cryptocurrency.
And more titles of this type could come.
He said that since cryptocurrency ETFs appeared in the US, investors have been recommended that, if they want to bet on them, they do not invest more than 2.5% of their portfolio, because it is not known what the fundamental value of the asset is. and presents a lot of volatility.
“Bitcoin has had a 70% drop, which is quite strong. The investor who wants to invest in cryptocurrencies has to know that this asset has had sharp falls in the past, so they have to be aware of the risks involved,” he stressed.
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