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On Tuesday, bitcoin hit a six-month high and was on the verge of a record as traders speculated that the anticipated registration of a futures-based U.S. exchange traded fund would herald investment flows into bitcoin and other assets.
Bitcoin, the world’s most valuable cryptocurrency by market capitalization, climbed as much as 1.5 percent during the Asian session to $62,991, its highest level since a record high of $64,895 in April. It is up about 40% in October on expectations that the introduction of bitcoin exchange traded funds (ETFs), of which many are in the works, will allow billions of dollars handled by pension funds and other institutional investors to flood into the industry.
ProShares’ Bitcoin Strategy ETF is slated to go public on Tuesday under the ticker BITO, assuming the Securities and Exchange Commission does not protest. Analysts emphasised that because the fund will not invest directly in bitcoin but rather in Chicago-traded futures, it may have no immediate impact on flows.
Speculators, on the other hand, have been betting that its launch will be a good indication for spot prices. Bitcoin futures climbed on Tuesday, closing at $62,690, and spot prices may rise if cash continues to flood in, according to cryptocurrency researchers at Arcane Research.
“This could lead to more constant buying pressure on CME, causing the open interest to rise. This will attract more cash and carry opportunities, leading to buying pressure in the spot market,” they said in a note. This year has seen the introduction of cryptocurrency exchange-traded funds (ETFs) in Canada and Europe, owing to the increased interest in digital assets.
VanEck and Valkyrie are among the fund managers pursuing US-listed ETF products, however Invesco announced on Monday that it will abandon ambitions for a futures-based ETF.
The Nasdaq authorised the Valkyrie Bitcoin Strategy ETF’s listing on Friday, and Grayscale, the world’s largest digital currency manager, plans to turn its Grayscale Bitcoin Trust into a spot bitcoin ETF. The ProShares ETF is slated to begin trading on Tuesday, following the expiration of a 75-day period during which the SEC might object to its listing on Monday.
Ether the second-largest cryptocurrency, has tracked bitcoin’s rise and also traded firmly on Tuesday. It was last up 1.2% at $3,790.
Story by : Norvisi Mawunyegah