Bitcoin nears all-time high on heels of ETF excitement

Decrypt Editor-in-Chief Dan Roberts joins Yahoo Finance to discuss

Video Transcript

ADAM SHAPIRO: OK, you know Bitcoin never sleeps. In fact, it's trading above $64,000 right now. And then, of course, there's the news about the ETF that deals in Bitcoin futures. ProShares BITO, B-I-T-O the ticker symbol, now available to anyone who wishes to take part in all of this.

But before you do, listen to what the editor-in-chief from Decrypt has to say. Dan Roberts joins us right now. There's a lot to digest here. What are people saying about this ETF? Because there's a lot more coming in down through the pipeline.

DAN ROBERTS: That's right, Adam. A lot more coming down the pipeline, and ProShares was merely first out the gate. Lucky enough to have filed way back. And something that people should understand is that the SEC in these cases, it doesn't quite literally or actively give an ETF the green light. That is the SEC never came out last week and announced we've approved this. Instead, the SEC had a period of time to block it and not allow it, and it allowed it to sail through.

So this is the first Bitcoin ETF, but as you mentioned, it's a futures ETF. It's not quite the pure or spot ETF that crypto people have wanted for years and waited for for years. So there are a lot of other outstanding applications still for a true Bitcoin ETF, and it's anyone's guess as to whether Gary Gensler would approve those or not just because they've now approved [INAUDIBLE] that the reason that he likes the futures ETF is because he thinks the protections and rules that govern the futures market protects investors better.

So Bitcoin is approaching all-time highs today. The BITO futures ETF is going to close today up 4.7%, but a lot of people in crypto will tell you this still isn't the ETF that they wanted.

SEANA SMITH: Yeah, and Dan, to the point, I guess from your perspective, how much of this is going to attract more mainstream investors versus how much of this is really an institutional play going forward?

DAN ROBERTS: Yeah, I mean, that's kind of the thinking for why the approval news sent Bitcoin immediately higher is that a lot of people say, oh, now that there's an ETF, it'll bring mainstream folks in, and that umbrella includes both institutions and also potentially retail investors. The emphasis being on retail because the thinking has always been, well, regular people who are kind of intimidated by the tech steps of buying Bitcoin on an exchange through a brokerage like Coinbase-- if there's an ETF where they can just buy it like it's a stock, then they'll come flooding in.

Maybe that's true, but, of course, what a lot of people say is if you want exposure to Bitcoin, why would you buy either a futures ETF or even a Bitcoin spot ETF? You could just buy Bitcoin. But again, a lot of people see that as kind of intimidating.

So, you know, look at how much it's up today, 4.7%. And, you know, the overall CME Bitcoin futures contracts have also risen big in the last four days. So that would seem to back up the idea that any kind of Bitcoin-related ETF is going to boost the price and bring in new investors.

But again, you know, there are people like Barry Silbert who runs Digital Currency Group and is a real OG in crypto, and he tweeted out something like friends don't let friends buy and hold a futures ETF. And as we know-- you know, I know you guys know this over at Yahoo Finance, the idea of a futures-contract ETF is much more complicated and wonky for the average person to understand than just a classic ETF that should have a price that matches the price of the underlying asset.

ADAM SHAPIRO: I'm going to shift gears here because last week we were talking about Andreessen Horowitz snagging two key people from Facebook. Now-- I don't even know, can we still call it the Novi wallet? But Facebook's going to team up with Coinbase and Paxos. What does the chess board look like, and why should we pay attention to this?

DAN ROBERTS: Well, we have to pay attention because it's Facebook, right? I mean, 2.9 billion users, whatever their market cap is. Whatever Facebook does, even though it certainly has had some things that it has tried that have failed, we have to pay attention, right?

And it is so funny, Adam. We were just talking about this last week, and I was saying where's Novi? I mean David Marcus came out, you know, back in August and said Novi is ready for the market. OK, where is it? Well, here we are today. Novi is launching in beta.

But at first it's going to be a wallet to hold Paxos Dollar, which is a stablecoin from this company called Paxos. Well, so, where is Diem? And let's remember in 2019 Facebook announced on the same day Libra, which was supposed to be a global cryptocurrency pegged to a basket of government currencies, and Calibra, which was going to be the Facebook wallet app to hold Libra. Then they changed the name of Libra to Diem, and they changed the name of Calibra to Novi. And now Novi is going to launch, but what about Diem?

And it's funny. That Facebook press release says that we're still committed to Diem, but boy, I'll believe it when I see it. They're awaiting regulatory approval. It's starting to look to me like Novi will just be a crypto app in Facebook to hold other cryptocurrencies. Which, by the way, Robinhood, PayPal, and Square already offer those services. So now Facebook is late and is competing with those fintech companies.

SEANA SMITH: Well, Dan, maybe they heard you calling for it last week and that's why they figured they needed to get it on the market as soon as possible.

But when we take a look at Coinbase-- because when you look at the share reaction today, share-price reaction, it's up just around 4%. How big of a win is this for Coinbase, or is it simply the fact that there aren't really many other options for Facebook to go with out there?

DAN ROBERTS: Well, as we've discussed, there are people out there who want exposure to Bitcoin. And before today when there was no ETF, they saw Coinbase as one way to do it. There are also ETFs that have been approved that are just baskets of stocks from companies that hold Bitcoin like Square, PayPal, Tesla.

So Coinbase when it debuted back in April was seen as a way to get exposure to Bitcoin, but it was kind of a roundabout way. You know, I mean, owning stock in Coinbase, it hasn't always behaved in lockstep with the price of Bitcoin.

Now, today it is up, but I also think that we have to give Coinbase credit. Its stock has done a lot better recently, not just in lockstep with Bitcoin but because Coinbase has made a lot of successful business moves like, for example, it announced that it's getting into NFTs. It's going to launch an NFT marketplace. And it opened up a waitlist, and that waitlist had something like 4 million people in a few days.

So I think Coinbase stock is up more in the past few days not just because of the fervor and excitement around the Bitcoin futures ETF and the price of Bitcoin, but that has certainly helped.

ADAM SHAPIRO: Dan Roberts is the editor-in-chief at Decrypt. We always enjoy having him come back home to Yahoo to bring us up to speed on crypto.

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