Bitcoin Prices Approach All-Time High in Run-Up to Futures ETF

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Bitcoin trading remains unregulated, but a wave of Bitcoin futures ETFs is likely to come.

Rutmer Visser / Dreamtime

Bitcoin
prices surged over the weekend and rose on Monday as an expectation that an exchange-traded fund plotting futures for the main crypto would start trading this week.

ProShares said its proposed Bitcoin Strategy ETF – to be traded under the ticker symbol BITO – could start trading as early as Monday, assuming U.S. regulators do not step in to block its launch.

The asset manager indicated October 18 as the fund’s proposed public offering date in an updated, “post-effective” registration statement filed with the Securities and Exchange Commission (SEC) on Friday, indicating that it had obtained regulatory approval. The New York Stock Exchange, where BITO is expected to be listed on the Arca Exchange, certified its listing approval on Friday.

Read also : What a Bitcoin ETF offers investors

The price of Bitcoin jumped 6%, from around $ 59,000 on Friday to $ 62,600 over the weekend, and held steady near $ 62,000 on Monday morning. The crypto hit an all-time high of nearly $ 65,000 in April and has climbed more than 425% since its price of around $ 12,000 in mid-October 2020.

U.S. regulators have long opposed an ETF for Bitcoin itself amid a broader cautiousness about regulation in the crypto space.

But after SEC Chairman Gary Gensler signaled he would be open to the idea of ​​a crypto ETF, fund managers like ProShares and Invesco filed a request to mine Bitcoin futures ETFs in the middle. speculation that these vehicles were more likely to be illuminated.

More: Cathie Wood’s ARK will name a new ETF for Bitcoin Futures

An ETF like BITO would hold futures contracts that represent bets on the rise or fall of the price of Bitcoin, much like ETFs that track oil and other commodities. While Bitcoin trading itself remains unregulated, futures contracts are traded and regulated by the


Chicago Stock Exchange
.

“Why would you want to buy a bitcoin futures ETF instead of bitcoin itself escapes me. But if you are an investor mandated to only have exposure to regulated markets, then this could be your chance to get involved, ”said Jeffrey Halley, analyst at brokerage Oanda.

“The all-time high around $ 65,000 is in sight, and a daily close above that level tilts the technical situation towards further gains targeting $ 80,000 in the future,” added Halley.

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