Cryptocurrency update: Bitcoin eyes new all-time high on ETF boost

Commodities

Bitcoin sets its sights on fresh all-time highs after getting ETF-shaped support this morning.

Cryptocurrency update

Bitcoin bounces as SEC gives crypto ETFs the green light

We spoke on Friday about the US Securities and Exchange Commission not being opposed to the idea of crypto ETFs.

Well, the SEC lived up to its word by okaying the introduction of cryptocurrency exchange traded funds on Friday.

Initially, BTC retreated to about $59,000 on the news, but Monday morning bought better price action. Bitcoin reached over $62,600 – its highest level for over 6 months – before finding a home more around the $61,100 mark.

Bitcoin has had a torrid time since peaking in April 2021. The volatility rollercoaster keeps on rollin’. But with the introduction of ETFs to the digital token trading sphere, the sector has been opened up wider. Can this stabilise prices? Maybe. It’s certainly possible that we’ll see a new all-time for Bitcoin as soon as the first exchange traded fund goes live.

Proponents of digital token ETFs reckon this is a good chance for traders and investors looking to enter crypto land to do so without needing to own any underlying assets. Plus, exchange traded funds by their very nature have to be regulated. That might attract those who are put off by crypto’s almost Wild West vibes.

ProShares Bitcoin ETF to start trading in 3,2,1…

It’s thought that ProShares’ Bitcoin ETF will be the first fund to start trading.

ProShares has said its newest fund will be available for trading on Tuesday.

The ProShares Bitcoin Strategy ETF, which will give exposure to bitcoin futures contracts but not the spot market, will trade under the BITO ticker.

NYSE Arca certified the fund’s approval for listing on Friday afternoon, around the time the SEC was mulling over approving such funds.

Let’s be clear: the SEC hasn’t actually given an explicit, formal declaration of crypto ETF approval. It may never give one. However, it’s clear to see that, with the upcoming launch of ProShares’ fund, that they’re fine.

So, brace for a bit of a deluge of digital token-tracking futures funds soon. Roughly 40 are alleged to be in the approval process.

Why the futures focus? According to SEC Chair Gary Gensler, futures-based products may be able to offer stronger investor and trader protections under current legislation.

As we know, there is little to no regulation in pure token trading right now. It is on the US’ agenda. For now, however, exchange traded funds may present a potentially “safer” option to traders. They are still pegged to crypto token prices though. I would expect to see some of that volatility spill into ETF performance.

Grayscale close to Bitcoin exchange traded fund filing

This week may see another big hitter punching its way into the new Bitcoin ETF frontier.

Reports suggest Greyscale is planning to convert its $38.7bn Bitcoin Trust (GCBT) into an ETF. It could make its application early this week.

This would be an interesting move. Greyscale is the world’s largest digital asset manager and the GCBT is also the largest trust of its kind in the world.

Where Greyscale’s plans differ to, say, ProShares is that the Trust is not linked to derivatives. It is composed of digital BTC tokens. Its ETF would do the same. That might throw up regulatory roadblocks during the approval process.

Based on the fact Greyscale’s proposed ETF would NOT be futures or derivatives based, some analysts believe there’s little chance of it gaining approval.

Once Greyscale makes its filing, authorities have 75-days to review it.