Bitcoin surged to a six-month high and was within striking distance of its all-time peak on Tuesday as traders bet an anticipated listing of a futures-based US exchange-traded fund could lead to an investment inflow into the cryptocurrency.
Bitcoin, the world’s largest cryptocurrency, rose 1.5% to $62,991 during the Asia session, its highest since mid-April and close to its record high of $64,895. It traded flat for the last time.
Known for its volatility over the course of its 13-year life, bitcoin is up nearly 40% this month, with hopes that bitcoin exchange-traded funds (ETFs) – many of which are operating – managed by pensions will raise billions of dollars. Will see funds and other big investors flow into this area.
ETFs are securities that track an asset and can be bought or sold on a stock exchange.
The ProShares Bitcoin Strategy ETF is expected to list on Tuesday under the ticker BITO, provided the US regulator, the Securities and Exchange Commission, does not object.
Analysts said the ETF will make it easier for retail investors to access cryptocurrencies.
“This could attract inflows from investors who prefer the ease of ETFs over the perceived risk of exchanges,” said Martha Reyes, head of research at crypto exchange Bequent.
Still, other analysts have cautioned that the fund will not invest directly in bitcoin — but rather in Chicago-traded futures — and so any immediate impact to the inflows may be limited.
But speculators are betting its launch is a positive sign for spot prices anyway.
Bitcoin futures are up 1.2%, last trading at $62,380.
“This could lead to continued buying pressure on the CME, which could lead to an increase in open interest. This will attract more cash and carry opportunities, thereby increasing pressure on the spot market,” crypto analysts at Arcane Research said in a note. “
Crypto ETFs have launched in Canada and Europe this year amid growing interest in digital assets. VanEck and Valkyrie are among fund managers pursuing US-listed ETF products, although Invesco dropped its plans for futures-based ETFs on Monday.
The Nasdaq approved the listing of the Valkyrie Bitcoin Strategy ETF on Friday, and the world’s largest digital currency manager Grayscale is planning to convert its Grayscale Bitcoin Trust to a spot bitcoin ETF, CNBC reported.
The ProShares ETF is set to begin trading Tuesday after a 75-day period during which the SEC can object to its listing, which ended on Monday.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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