7 Stocks That Could Capitalize On First Bitcoin ETF's Debut

The ProShares Bitcoin Strategy ETF BITO is the first U.S. Bitcoin BTC/USD ETF to trade on Wall Street, beginning Tuesday.

All About The Bitcoin ETF: The ProShares ETF offers exposure to bitcoin futures contracts rather than physically settled bitcoin.

The long-sought approval of a U.S. bitcoin ETF is an overall positive for the space, Needham analyst John Todaro said in a note. A bitcoin ETF brings about additional institutional involvement in the space and ultimately reduces the risk of certain crypto assets, in particular bitcoin, from seeing hyper restrictive regulations, he added.

The ETF began trading on the NYSE Tuesday under the ticker symbol BITO.

The net asset value of the ETF was $40 as of Oct. 18 and the expense ratio, or the amount of investment that will be deducted annually as fees, is 0.95%. Fund holdings as of Oct. 18 include CME Bitcoin Futures and CME Micro Bitcoin Futures.

Related Link: This Crypto Miner Has Generated A Better 1-Year Return Than Bitcoin, Ethereum And XRP

Bitcoin Extends Rally: In the run up to the debut, Bitcoin, the underlying asset, climbed strongly. On Friday, the crypto scaled the psychological resistance level of $60,000 for the first time since April 18.

Bitcoin pulled back on Saturday amid profit taking before taking off yet again. The crypto has ended higher both on Sunday and Monday, and is seen adding to the gains in Tuesday's session.

The positive sentiment is contagious, as most other altcoins are seen trading higher on Tuesday.

Other Potential Beneficiaries: Additional institutional involvement in the crypto space in the wake of the new Bitcoin ETF is seen as a positive for cryptocurrency exchange Coinbase Global, Inc. COIN, Needham's Todaro said.

The analyst also sees bitcoin miners benefiting out of the development.

It's still unclear as to what extent investors will favor direct exposure to bitcoin via an ETF vs gaining similar exposure via existing public companies levered to bitcoin such as the miners and Coinbase, the analyst said.

Needham, however, is positive on companies that can diversify revenue within the entire crypto stack across different verticals.

Bitcoin miners that could partake in the ETF listing-induced rally are:

Riot Blockchain, Inc. RIOT
Marathon Digital Holdings, Inc. MARA
Canaan Inc. CAN
Hut 8 Mining Corp. HUT
Bitfarms Ltd. BITF
HIVE Blockchain Technologies Ltd. HIVE

Bitcoin was up 1.3% at $62,710 midday Tuesday. 

Related Link: Best Crypto ETF

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