Bitcoin surged above $60,000 for the first time in six months on Friday, pushing the digital coin further toward its all-time high, as traders speculated US regulators would approve the launch of the first Bitcoin futures exchange-traded fund (ETF).
The world’s biggest cryptocurrency rose 6% to its highest level since Apr. 17 at $61,488.41, according to Coin Metrics.
The US Securities and Exchange Commission (SEC) is set to allow the US Bitcoin futures exchange-traded funds (ETFs) to begin trading next week, as Bloomberg News reported on Thursday.
“It is clear that the recent spike in Bitcoin’s price is directly related to the rumor that the SEC will move ahead with the US first Bitcoin ETF approval, said Mikkel Morch, executive director and risk management at crypto hedge fund ARK36. “It is becoming increasingly likely that at least one of the major contenders for a BTC futures ETF, such as Valkyrie or Van Eck, could be approved in the coming days and ahead of SEC’s hard November deadlines.”
Also, the source familiar with the matter told CNBC that the SEC isn’t likely to block the ETFs proposed by ProShares and Invesco, which are based on futures contracts and were filed under mutual fund guidelines that SEC Chairman Gary Gensler thinks to offer investors significant protection. Although SEC Chairman 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 ProShares Bitcoin Strategy ETF is scheduled to debut at the New York Stock Exchange on Tuesday, and experts believe the SEC is unlikely to object to the product.
Approval of an ETF that gives mainstream investors exposure to Bitcoin would be a landmark for the crypto industry, which has long been pushing for greater acceptance of digital assets on Wall Street.
“The ETF news is being priced in with the market expecting an approval on Monday. This is driving the price up,” said Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno.
Although he warned that a rejection of ProShares’ product could send Bitcoin sharply lower.
“Investors should be aware that the hopes for a sustained rally above the $60K barrier and further through the previous all-time high may as well turn into ‘buy the rumor, sell the news’ scenario,” Morch added.
Remarkably that recent Gensler’s reassurances that the SEC has no plans to ban cryptocurrency fueled the previous wave of Bitcoin rally.