BITCOIN IS APPROACHING $60,000 AS INVESTORS EYE FIRST US ETFS

Fri 15 October 2021:

On Friday, bitcoin reached a six-month high, approaching the April peak, as traders grew more optimistic that US regulators would authorize the launch of an exchange-traded fund based on its futures contracts.

The world’s most valuable cryptocurrency climbed nearly 4% to $59,664, its highest level since mid-April. It has more than doubled in value this year and is close to the record high of $64,895 set in April.

Bloomberg News reported on Thursday that the US Securities and Exchange Commission (SEC) is set to authorize the first US bitcoin futures ETF to begin trading next week, citing people familiar with the matter.

Ben Caselin, head of research and strategy at Asia-based cryptocurrency exchange AAX, said bitcoin’s spike above $59,000 wasn’t arbitrary and long-term investors had been accumulating it for a while.

“It is widely expected that Q4 will see significant progress around a bitcoin ETF in the US,” he said.

Friday’s moves were also spurred by a tweet from the SEC’s investor education office, he said.

“Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits,” the SEC tweet stated.

The approval of the country’s first bitcoin ETF has been awaited by cryptocurrency investors, and some of bitcoin’s recent gain has been in anticipation of that move and how it could speed up its mainstream adoption and trading.

Several fund managers have applied to launch bitcoin ETFs in the United States, including VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie, and Galaxy Digital Funds. This year, cryptocurrency ETFs were introduced in Canada and Europe.

According to SEC Chair Gary Gensler, the crypto market contains many tokens that may be unregistered securities, making prices subject to manipulation and putting millions of investors to danger.

The Bloomberg report said that the proposals by ProShares and Invesco are based on futures contracts and were filed under mutual fund rules that Gensler has said provide “significant investor protections”.

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