Daily Management Review

Bitcoin Surges Past $60,000 To Reach A Six-Month High Due To US ETF Expectations


Bitcoin Surges Past $60,000 To Reach A Six-Month High Due To US ETF Expectations
With growing speculation among bitcoin investors that the United States regulators would approve a futures-based exchange-traded fund (ETF) which would, in turn, clear the path for more widespread investment in digital assets, the value of bitcoin surpassed $60,000 for the first time in six months on Friday and the digital currency approaching its all-time high.
Investors betting on the first U.S. ETF to be approved soon actually fuelled the recent rally of the bitcoin.
At one point on Friday the value of the most valuable cryptocurrency of the world, its highest level since mid-April, and ended the day at 6.8 per cent higher for the day at $61,346. Since September 20, the price of bitcoin has risen by more than half and is now closing in on its April high of $64,895.
Bloomberg News reported on Thursday that the Securities and Exchange Commission (SEC) will allow the first American bitcoin futures ETF to start trading as early as next week. Traders and analysts believe that such a move would provide investors with a new way to gain exposure to the emerging asset.
"Crypto ETFs are inevitable. A product like this will eventually come to fruition since there is a demand for it," said Chris Kline, chief operating officer and co-founder of Bitcoin IRA.
"It seems clear that regulators will approve some version of a crypto ETF soon, most likely by Monday," Kline added. "As regulators become more familiar with the space, the SEC is starting to understand how these assets are stored, secured and reconciled so that it makes sense in traditional finance."
According to Ben Caselin of Asia-based crypto exchange AAX, bitcoin's moves on Friday were sparked by a tweet from the SEC's investor education office that urged investors to carefully consider the risks and opportunities of investing in funds that hold bitcoin futures contracts.
A number of fund managers have applied to launch bitcoin ETFs in the United States, which includes those from VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie, and Galaxy Digital Funds.
The Valkyrie Bitcoin Strategy ETF was approved for listing on the Nasdaq on Friday.
It has been months that this has been going on between the SEC and potential bitcoin futures ETF issuers. At present, it appears that the regulator is now on the verge of approving a small number of filings that will pave the way for wider adoption of cryptocurrencies and retail and institutional investors alike would have access to cryptocurrencies.
The SEC need not have to provide explicit approval to ETFs, which can be launched after a 75-day period if the US regulator has no objections, according to the rule sets used by ETF issuers.
The ProShares Bitcoin Strategy ETF's 75-day holding period ends on Monday, and the ETF can be launched on Tuesday.
No comments were available from The Securities and Exchange Commission (SEC).
Issuers have launched crypto ETFs this year in Canada and Europe, and a surge in interest in digital assets has resulted in those gaining popularity.
Cboe Global Markets Inc, a futures exchange operator, has filed an application to the SEC for a change in the rule that would give it permission for listing specific complex ETFs. On October 1, the SEC approved that application.