On Friday, Bitcoin surpassed $60,000 for the first time in six months, approaching its all-time high, as speculation rose that US authorities will approve a futures-based exchange-traded fund (ETF), paving the way for more widespread investment in digital assets.
Bitcoin investors have been anticipating the approval of the first U.S. ETF, with wagers on the outcome propelling the cryptocurrency’s recent rise. Cryptocurrency’s most valuable coin hit a new high of $61,869.05, its highest level since mid-April, and is currently trading at $61,346. Since September 20, it has risen by more than half and is approaching its April high of $64,895.
The Securities and Exchange Commission approved bitcoin futures ETFs, a first for the market, following a meeting of the regulator’s five commissioners. ProShares, which applied for its Bitcoin Strategy ETF this summer, could be the first to begin trading next week.
On Oct. 15, the company filed a post-effective modified prospectus, claiming that the fund will begin trading on Monday, Oct. 18. However, the fund may not begin trading immediately.
Proponents of a Bitcoin ETF claim that by providing investors with a regulated alternative to the underlying digital asset, the product will be more readily accessible for those interested in bitcoin than the actual cryptocurrency. The first product, on the other hand, will track bitcoin futures rather than bitcoin’s price. Futures-based products, according to SEC Chair Gary Gensler, may provide stronger investor protections due to the laws under which they operate.
Although the SEC has previously expressed its opposition to bitcoin ETF ideas, it is no longer compelled to do so. Rather than making a public announcement, the SEC can just allow an application to become effective.
The form is “a step forward” for digital assets and integrating them with the more traditional financial industry, according to ETFStore President Nate Geraci. He confirmed that the SEC’s tacit permission is confirmed by the filing of a post-effective modification.
“Seeing SEC Chairman Gensler feel comfortable with enabling mainstream investors more easily access bitcoin exposure is a positive indication for the future of crypto,” he said in an email. “The existence of a Bitcoin ETF will now attract more investors to the crypto area and promote more education.”
The filing is also a hint of the fund’s launch, according to James Seyffart, an analyst at Bloomberg Intelligence. He also expects the futures-based ETF to serve as a stepping stone toward the eventual introduction of a spot market-based ETF. ProShares’ updated filing, according to Seyffart, deleted material about the fund potentially investing in Canadian Bitcoin ETFs as a hedge. “It appears that the SEC, for whatever reason, did not like that language,” he said.
“However, they are adhering to industry standards and allowing the first to file to launch first.” As a result, we’ll be keeping a careful eye on how much of a first-mover advantage there is in this case.” CoinDesk was directed to the post-effective prospectus by a ProShares spokesman.
A Bitcoin ETF has long been sought by industry participants, with Gemini founders Tyler and Cameron Winklevoss originally requesting one in 2013. The SEC has denied every previous application and has failed to make a decision on more than 30 more applications currently pending.
However, it’s likely that the SEC will only allow futures ETFs to begin trading this year. Gensler’s support for a futures ETF suggests that a spot market ETF will not be launched in the near future. Seyffart remarked, “I seriously doubt the SEC will approve the product this year”.
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