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Bitcoin will extend gains following the approval of the first bitcoin futures exchange-traded fund (ETF) in the U.S., according to Tom Lee, head of research at FSInsight, a markets strategy and research firm in an Oct. 18 note.

The 10 largest ETF launches witnessed inflows of $14 billion in their first year on average. The most successful was the Nasdaq 100 ETF (NASDAQ: QQQ) in 1999, with inflows of $36 billion. FSInsight expects demand for ProShares’ Bitcoin Strategy ETF to surpass that of QQQ and forecasts inflows of more than $50 billion.

Read more: ProShares Bitcoin Futures ETF to Start NYSE Trading on Tuesday

The new ETF, which starts trading on the New York Stock Exchange today, will also allow many more investors to allocate to crypto and this will result in significant new inflows, which will result in price gains, FSInsight says.

FSInsight estimates that bitcoin daily demand will increase by $50 million due to ETF inflows and if the block reward is $10 million per day the “equilibrium price to clear this, based on analysis by our data science team = $168,000.”

This equilibrium price, which is the value at which demand for bitcoin meets supply, is above FSInsight’s bitcoin year-end target of $100,000. Bitcoin was trading at about $62,260 as of publication time.

Read more: Ether, Bitcoin to Strengthen in Coming Weeks, FSInsight Says

There is an old saying on Wall Street: buy the rumor, sell the news. The adage is based on the belief that market participants, being forward-looking, tend to buy an asset when expecting positive information and take profit, driving the market lower on confirmation of the news.

Bitcoin has rallied over 40% this month on expectations that the U.S. Securities and Exchange Commission (SEC) would approve an exchange-traded fund investing in futures contracts tied to the cryptocurrency. With ProShares’ product set to go live on the New York Stock Exchange on Tuesday, there is a lot of noise in the market about the possibility of a sell-the-fact pullback in bitcoin. Analysts, however, stand divided on the issue.

“Will someone please remind [me] the day before the bitcoin ETF officially launches? I might want to take some chips off the table,” Dan Morehead, CEO & co-chief investment officer of Pantera Capital, wrote in his newsletter earlier this month. “On Wall Street, there’s a saying, “Buy the rumor, sell the fact. [ITs] Definitely working in our space.”

Bitcoin had surged by over 2,000% in about six weeks leading up to the launch of futures contracts on the Chicago Mercantile Exchange (CME) on Dec. 17, 2017. The cryptocurrency peaked near $20,000 on the same day and entered a year-long bear market.

Similar price action was seen earlier this year as bitcoin topped out at $64,801 with crypto exchange Coinbase’s debut on Nasdaq on April 14. The cryptocurrency fell to $30,000 the following month.

Blockchain data supports the case for a sell-the-fact action after ETF listing, as discussed in Monday’s First Mover newsletter. The exodus of coins from centralized cryptocurrency exchanges has stalled in recent weeks, contrary to the steady decline in exchange balances observed during the bull run from $10,000 to over $64,000.

“This goes in line with the expectation that once trading goes live for a Bitcoin ETF, we will likely see a sell-off event,” Nick Mancini, research analyst at Trade The Chain, said in a Twitter response. “The reason you keep crypto on exchanges is because you plan to make use of that liquidity. Keep a lookout for a major selling event this week.”

Some selling may be seen if the uptake for the newly launched product is weak.

“Disappointment from the BTC futures ETF listing could provoke a correction – after other seminal BTC market moments such as the listing of BTC futures on the CME in December 2017 and the listing of Coinbase on Nasdaq in April 2021, the market fell sharply,” said Noelle Acheson, head of market insights Genesis Global Trading, Inc. “However, even if there is some sell-off, it is unlikely to be as deep or lasting as the previous examples because of where we are in the market cycle. In both previous cases, the market was already frothy and showing signs of exhaustion – that is not the case this time around,” Acheson said.

Pankaj Balani, CEO of Delta Exchange and Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, also ruled out a big pullback, saying the focus will be on the first-day trading volume of the ProShares futures ETF.

Meanwhile, Stack Funds’ COO and co-founder Matthew Dibb doesn’t foresee a significant price drop. “BTC funding rates are mostly flat, indicating little leverage in the market. The structure of Bitcoin futures is indicating a substantial premium for long-dated ownership as Sep 22 is trading at $68880,” Dibb told CoinDesk in WhatsApp chat. “We see no warning signs that the market is overheated in the short term.”

Calculated every eight hours, the funding rate refers to the cost of holding long positions in the perpetual futures [futures without expiry] market. A very high funding rate is widely taken to represent excess bullish positioning and often precedes price pullbacks.

Data from Glassnode shows, the average funding rate has receded to 0.01% from 0.024% seen over the weekend.

The options market is showing no signs of nervousness with one-week, one-, three- and six-month put-call skews signaling a call or bullish bias with negative values.

Put-call skews measure the cost of puts or bearish bets relative to calls or bullish bets. A negative value implies calls are drawing greater demand than puts.

“The favoured options contracts appear to be call options with strike prices above $100,000, with a typical open interest of $250 million to $350 million for call options expiring at the end of the year. The open interest in call options dwarfs that in put options, aligning with the overall bullish market sentiment,” Glassnode said in its weekly report published Monday.

News agency The Associated Press launched a collection of non-fungible tokens on Binance’s marketplace, according to a Binance press release.

• The collection, dubbed “Unique Moments,” features digitized versions of photos and news wires based on the AP’s reporting on historical moments of the the last century. Examples include Japan’s WWII surrender, Nelson Mandela’s inauguration, and the discovery of Pluto.
• The AP confirmed the news in a tweet late on Thursday. The news agency did not respond to CoinDesk’s request for comment as of press time.
• The NFTs are available as mystery boxes, each priced at BUSD 29 (Binance’s stablecoin). There are four different levels of rarity; normal, rare, super rare, and super super rare.
• Buyers who collect one normal, one rare, and one super rare item, but also don’t sell them until 11:59PM UTC on Oct. 25 will have a shot at winning another NFT that “symbolizes the AP’s reach in the world.”
• The collection will drop at noon UTC time on Thursday, and each Binance account can buy up to 25 boxes.
• The collection is curated by Metalist Lab, an Australian NFT publisher that has previously worked with Chinese gaming giant NetEase. Metalist Lab announced the news on Oct. 8.
• The AP sold an NFT artwork for $180,000 in ether back in March. The New York Times and The New Yorker have also sold NFTs.
• Binance launched its NFT marketplace in June.

Read more: Binance NFT Marketplace to Launch With Warhol, Dali Collection

France’s central bank has executed a series of bond transactions leveraging blockchain using its own digital currency as part of a 10-month pilot.

The Banque de France, along with a consortium of France’s largest financial market participants, executed the transactions using a system developed by U.S.-based IBM.

Nearly 500 instructions in both primary and secondary markets were executed, though the value of the transactions has not been disclosed, according to a report Tuesday by the Financial Times.

BNP Paribas, Crédit Agricole CIB, HSBC, and Societe Generale made up the consortium.

Led by securities depository Euroclear, the pilot also included large French banks as well as the French public debt office, per the report.

The CBDC trial is one of the EU’s largest to date with France regarded as one of the highest-profile eurozone members to launch such an experiment. Sweden, whose Riksbank is also toying with digitizing its national currency, uses the e-krona.

Earlier this year, the Banque de France published a request for proposals for central bank digital currency (CBDC) “experiment” applications in a bid to help it understand the risks and mechanisms of CBDCs. The bank has also engaged in a number of experiments using a CBDC for the wholesale market and cross-border payments as well as interbank settlements.

China is currently the largest economy leading the charge with the implementation of a CBDC for use within its domestic market and plans to extend its CBDC trials to foreigners visiting the nation during next year’s Winter Olympics, to be held in Beijing.

And while the EU and the U.S. are yet to develop to advanced stages, the threat of private cryptocurrencies, including stablecoins pegged to fiat currencies, has prompted a number of nations to pursue CBDCs.

“This project went well beyond previous blockchain initiatives because it successfully tested most central securities depository and central bank processes whilst eliminating current interim steps, such as reconciliation between market intermediaries,” said Soren Mortensen, global director of financial markets at IBM as cited in the report. “We are rapidly moving towards fundamental change in the post-trade market infrastructure.”

Read more: Société Générale Shopping for Crypto Custodian: Sources

Huobi’s Japanese subsidiary received approval from the local Financial Services Agency to offer crypto derivatives, according to a Thursday press release.

• Huobi Japan is one of seven exchanges in the country to have successfully registered with the regulators as a Type I financial instruments business.
• To register, firms must have stated capital and net assets upwards of JPY50 million ($438,061 each, and a capital-to-risk ratio over 120%.
• In April 2020, Japan’s FSA ruled that, to offer crypto derivatives, crypto firms have to go through the same regulatory hoops as mainstream finance companies and be registered as Type I financial instruments businesses.
• A total of 31 exchanges are registered in Japan, according to the FSA.
• Japan’s financial regulator has implemented some of the strictest rules for crypto in the world; individual tokens have to receive approval to be listed on exchanges.

Read more: Japan’s Financial Services Regulator Issues Binance Warning

Blockchain Moon Acquisition Corp (BMAC), a newly formed special purpose acquisition company (SPAC) based in Florida, has been given the green light by the U.S. Securities and Exchange Commission to list $100 million worth of shares under an initial public offering (IPO).

The pricing of its IPO of 10 million units at $10.00 per share will be listed on Tuesday via the Nasdaq Global Market under the ticker symbol “BMAQU,” according to a Form S-1 filing with the SEC last month.

Chardan Capital Markets LLC of New York is acting as sole book-running manager while the offering is expected to close on Oct. 21.

With the listing, BMAC’s CEO Enzo Villani told CoinDesk via email on Monday the next step was to “find the right target for the SPAC and execute a merger.”

“We … have been working on this for the past few months,” said Villani. “The SPAC is focused on merging with a growth-oriented company in the blockchain economy who is seeking capital and can leverage the public markets to scale their business.”

A SPAC is a company without commercial operations and is designed to raise capital via an IPO aimed at acquiring and merging with existing companies. BMAC defines itself as a “blank check” company focused on pursuing high-growth blockchain technologies firms throughout North America, Europe and Asia, according to its website.

According to the filing, the blockchain firm intends to seek out companies with “significant competitive advantages and/or underexploited expansion opportunities.” The expansion can be accomplished through a “combination of accelerating organic growth and finding attractive add-on acquisition targets,” the company notes.

“We intend to seek to identify companies with strong, public-ready management teams, with solid corporate governance and reporting policies that have the experience to execute successfully and create value for stakeholders,” the filing reads.

Read more: What Is a SPAC? Your Questions Answered

Australia is more bullish on cryptocurrencies than most other countries around the world, according to a survey published by comparison site Finder on Sunday.

The survey, based on the site’s Cryptocurrency Adoption Index, measures the growth of crypto globally through a regular survey of over 41,600 individuals across 22 countries.

Finder’s survey found Australia has the third-highest rate of crypto ownership at 17.8%, beating out countries such as Indonesia (16.7%) and the city of Hong Kong, a special administrative region of China (15.8%).

The global average is around 11.4%, according to Finder’s results.

“Australian’s love to gamble,” Fred Schebesta, CEO of Finder, told CoinDesk via Signal on Monday. “They are also super savvy in terms of finance … the laws around crypto make it super smooth to buy and sell.”

Of the nearly 1 in 5 adults in Australia who own some form of crypto, Finder found bitcoin is the most popular coin for with 65.2% of Australian’s owning the world’s largest crypto, the fifth-highest percentage of all 22 countries surveyed.

Ethereum, meanwhile, is the second most popular coin within the island nation with a share of 42.1% while cardano’s share comes in third at 26.4%.

Two other cryptos Australian crypto owners currently hold are dogecoin and binance coin which stand at 23% and 14.6% respectively, according to Finder’s results.

“Banking in Australia is really smooth and super easy to withdraw and deposit,” Schebesta added. “Other countries have a lot more laws and challenges around getting your money in and out [of crypto].”

Read more: Top Australian Crypto Exchanges Say They Aren’t Threatened by the Bigger Players

The U.S. Treasury Department said on Monday in a report that cryptocurrencies could undermine the effectiveness of U.S. sanctions.

• The report, which followed a six-month review of U.S. sanctions against countries with whom it is at odds or suspects of being behind illegal activity, noted that “digital currencies, alternative payment platforms, and new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions.”
• “These technologies offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system,” the report said, and could be used by adversaries “to to build new financial and payments systems intended to diminish the dollar’s global role.”
• The U.S. has put over 9,000 sanctions in place against countries that it alleges are behind terrorism and illegal actions or committed human rights violations, including North Korea and Iran, according to a New York Times story.
• The report recommended that the agency itself enhance its “institutional knowledge” of cryptocurrencies and their use.
• It also recommended that the agency itself improve its communications with industry organizations, financial institutions and others that touch the crypto space.

DraftKings tapped Polygon for its marquee non-fungible token (NFT) release with Tom Brady’s Autograph back in August.

Now the sports betting giant is going all-in on the Ethereum layer-2 solution with a partnership that could make it one of the blockchain’s largest governors.

DraftKings, valued at nearly $20 billion on the public market, is planning to use Polygon to support custom NFT drops and secondary-market transactions.

“Scalability and sustainability remain among the critical challenges of blockchain technology,” Paul Liberman, president of global product and technology at DraftKings, said in a statement Monday. “Although DraftKings Marketplace is still in its nascency, we are bullish on the possibilities that blockchain, NFTs, cryptocurrency and more will present as we prepare for Web 3.0 alongside Polygon and the new innovations ahead for digital collectibles.”

Read more: DraftKings Charts NFT Long-Game With Marketplace Debut

The partnership also gives DraftKings the option to contribute to Polygon’s governance, a system where token holders have a say in implementing changes to the network after staking their tokens on the platform.

A Polygon representative told CoinDesk in an interview they anticipate DraftKings’ governance to begin “in the next month.”

Europe’s largest telecommunications company, Deutsche Telekom AG, pulled a similar move in February, providing backend support for Chainlink and Flow, the blockchain that hosts NBA Top Shot.

This Tuesday, the first U.S. bitcoin exchange-traded fund (ETF) is set to be launched, ending around six years of demand and anticipation. Assuming nothing goes wrong, ProShares’ ETF will begin trading on NYSE Arca under the ticker $BITO.

But it’s not entirely straightforward. This ETF will focus on bitcoin futures as opposed to holding spot bitcoin, which is a little different. And just because it will go live, doesn’t mean it will necessarily be available to everyone. We take a look at some of the main questions surrounding the swathe of bitcoin ETFs that have been proposed in the U.S.

What’s the difference between a futures ETF and a spot ETF?

With Gary Gensler at the helm of the Securities and Exchange Commission (SEC), it appears to have decided that a bitcoin futures ETF should go ahead — as opposed to one based on spot trading. And there are some key differences between the two.

With a spot ETF, the value of the ETF will closely track the spot price of the underlying asset, in this case bitcoin. In comparison, a futures-based fund may underperform or outperform the spot price — potentially leading to a premium or discount. (In the short term the prices might diverge, but typically they will be similar over the long term.)

A futures-based ETF will involve the cost of rolling contracts that are about to expire to ones that have longer expiration dates. A spot-based ETF won’t have that cost, but it will have to pay for a custodian to look after the bitcoin — something relatively unique to bitcoin. 

Both types of ETFs will likely help to increase the demand for bitcoin. For a spot ETF, bitcoin would be purchased as the underlying asset. For a futures ETF, traders will typically hedge their positions by buying physical bitcoin. 

Why would the SEC prefer a bitcoin futures ETF?

A lot has been made of the SEC’s approval of futures-based funds and distaste for a spot bitcoin ETF. The thinking behind it is that there are better investor protections around the futures market. 

As an ETF based on futures, that means it will be an actively managed fund. The company issuing the fund will trade bitcoin futures and the success of the fund will depend on their trading strategies.

Currently, the proposed bitcoin futures ETFs would only include long positions. That means the companies behind the ETFs would only be able to take long bitcoin positions and would not be able to take any short positions. There are other companies trying to launch inverse bitcoin futures ETFs — which are for short positions — but they haven’t been approved yet.

One important difference in the eyes of the SEC seems to be that while spot bitcoin trades on venues that aren’t regulated at the federal level, futures trade on the Chicago Mercantile Exchange, which is regulated by the Commodity Futures Trading Commission.

There are around five bitcoin futures ETFs in line to launch in the near term, with potentially two launching this week.

Will a spot bitcoin ETF get approved?

This question depends on the SEC and, potentially, the success of the imminent bitcoin futures ETFs. So far, the SEC has not expressed any positive signs that it will approve one.

Sui Chung, CEO of CF Benchmarks — which provides market data for the CME bitcoin futures and Proshares’ upcoming bitcoin ETF — said that the launch of the bitcoin futures ETFs will likely not harm the applications for spot ETFs. 

But on the flip side, he acknowledged that “if these futures ETFs go well and they get fairly big and are able to satisfy demand that’s out there from investors for bitcoin through ETF channels, then the SEC could argue that demand has been fulfilled, there’s no need for us to authorize a spot ETF.”

How much demand will there be for a bitcoin futures ETF?

There has been a lot of anticipation for a bitcoin ETF because — by virtue of being an ETF — it can be made accessible to a lot of US citizens, particularly in a tax-efficient way. One of the most common ways to invest in the US is with a 401K and ETFs can be included in this investment vehicle.

But it’s not entirely that simple. While bitcoin ETFs are now set to launch, Chung said it remains up to the big investment firms, like Charles Schwab and TD Ameritrade, whether they will make the ETFs available to their customers. 

“They may very well be supporting it but what I’m saying is it’s not a given,” Chung said. He added that it’s possible they don’t make the ETFs available to all customers, potentially only letting certain clients access them.

That aside, Chung noted that there’s a lot of demand for bitcoin through an ETF wrapper, which he expects to be filled in the next few days as they go live. “After that, the sustained interest and sustained inflow is very hard to predict,” he said.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.