Bitcoin nears record high ahead of futures ETF listing

SINGAPORE – Bitcoin hit a six-month high and was within striking distance of a record on Tuesday (Oct 19) as traders bet that an anticipated listing of a futures-based US exchange-traded fund (ETF) could herald investment flows into Bitcoin and cryptocurrency assets.

Bitcoin, the world’s biggest cryptocurrency by market value, rose as far as 1.5 per cent during the session to US$62,991, its strongest level since the record peak of US$64,895 in April.

It is up some 40 per cent in October on hopes that the advent of Bitcoin ETFs, of which several are in the works, will allow billions of dollars managed by pension funds and other institutional investors to flow into the sector.

ProShares’ Bitcoin Strategy ETF is expected to list on Tuesday under the ticker BITO, provided the United States regulator, the Securities and Exchange Commission (SEC), does not object.

Analysts cautioned that the fund will not directly in Bitcoin – rather in Chicago-traded futures – and so may not have any immediate implications for flows. But speculators have been wagering its launch is a positive signal for spot prices anyway.

Bitcoin futures rose on Tuesday, last trading at US$62,690, and spot prices could rise if cash keeps flowing in, said cryptocurrency analysts at Arcane Research.

“This could lead to more constant buying pressure on CME (Chicago Mercantile Exchange), 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.

ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing US-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

The Nasdaq last Friday approved the listing of the Valkyrie Bitcoin Strategy ETF, and Grayscale, the world’s largest digital currency manager, is planning to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF, CNBC has reported.

ProShares ETF is set to begin trade on Tuesday after a 75-day period, during which the SEC could object to its listing elapsed on Monday.

Ether, the second-largest cryptocurrency, has tracked Bitcoin’s rise and also traded firmly on Tuesday. It was last up 1.2 per cent at US$3,790.

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