Bitcoin topped US$60,000 for the first time in six months on Friday, nearing its all-time high, as hopes grew that U.S. regulators would allow a futures-based exchange-traded fund (ETF), a move likely to open the path to wider investment in digital assets.
Cryptocurrency investors have been waiting for approval of the first U.S. ETF for bitcoin, with bets on such a move fueling its recent rally.
The world’s biggest cryptocurrency rose to US$60,407.26, its highest level since mid-April, and was last up 4.9 per cent at US$60,177. It has risen by more than half since Sept. 20 and is closing in on its record high of US$64,895 hit in April.
The U.S. Securities and Exchange Commission (SEC) is set to allow the first American bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.
Such a move would open a new path for investors to gain exposure to the emerging asset, traders and analysts said.
“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 said. “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.”
Bitcoin’s moves on Friday were spurred by a tweet from the SEC’s investor education office urging investors to weigh risks and benefits of investing in funds that hold bitcoin futures contracts, said Ben Caselin of Asia-based crypto exchange AAX.
Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch bitcoin ETFs in the United States.
The Nasdaq on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF.
Crypto ETFs have launched this year in Canada and Europe, growing in popularity amid surging interest in digital assets.
Futures exchange operator Cboe Global Markets Inc applied for a rule change with the SEC which would allow it to list certain complex ETFs. The SEC approved that application on Oct. 1.
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.
Citing people familiar with the matter, the Bloomberg report said proposals by ProShares and Invesco, based on futures contracts, were filed under mutual fund rules that Gensler has said provide “significant investor protections.”
The SEC did not immediately respond to a request for comment on the report.
“It’s one of the final frontiers for mandate access,” said Joseph Edwards, head of research at crypto broker Enigma Securities.
“Plenty of Americans in particular have strings attached to how they deploy a lot of their wealth. It allows bitcoin to get in on the sorts of windfall that keep U.S. equities as consistently strong as they are.”
(Reporting by Tom Wilson in London, Alun John in Hong Kong, Gertrude Chavez-Dreyfuss in New York; Medha Singh, Mrinmay Dey, Shubham Kalia in Bengaluru; Editing by Alexander Smith, Jason Neely and Jonathan Oatis)