Bitcoin, the largest cryptocurrency by market capitalization has hit a six-month high on Friday, approaching the record hit in April, as traders became increasingly confident that U.S. regulators would approve the launch of an exchange-traded fund based on its futures contracts.
U.S Sec Set to Allow Bitcoin Features ETFs
The U.S. Securities and Exchange Commission (SEC) is poised to allow the first U.S. bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday, citing people familiar with the matter.
Ben Case, head of research and strategy at Asia-based cryptocurrency exchange AAX, said the digital currency’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 U.S.,” 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.
Cryptocurrency investors have been waiting for news of the approval of the country’s first bitcoin ETF, and some of the cryptocurrency’s rally in recent months has been in anticipation of that move and how it could speed up its mainstream adoption and trading.
Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch the ETFs in the United States. Cryptocurrency ETFs have been launched this year in Canada and Europe.
SEC Chair Gary Gensler has previously said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks.
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”.