The Bitcoin ETF approvals seem to be exciting the market as Bitcoin reached a new all-time high as we are reading more in our latest Bitcoin news.
The price of bitcoin increased 3% over the past day to surpass its old all-time high of $64,804 that was set back in April. Right now, the leading cryptocurrency is hitting $64,872 according to CoinGecko, and could spike higher. BTC was moving upwards since crashing to $30,000 in July and most of the price movement came at the end of the bad climate in September. However, now it is up by 50% thanks to the Bitcoin ETF approvals in the US.
The working theory is that BTC increased due to the prospects of the US SEC which allowed a Bitcoin ETF proposal to go thorugh for the first time. However, the price stalled over the weekend after it became clear that the SEC will allow the ProShares Bitcoin ETF which is backed by BTC futures to start trading a day ago. Now that ProShares is on the market, there are other Bitcoin futures ETFs on the way which are boosting the price up. A bitcoin exchange-traded fund or ETF is a financial instrument that tracks the price of BTC and trades like a stock but the SEC hasn’t been able to approve one for way too long. By allowing it, it would allow main street investors to incorporate BTC ownership into their own retirement plans which will drive up the demand for BTC.
The Bitcoin futures ETF offered by ProShares functions differently so rather than tracking the price of BTC at any given moment, it is able to track where investors will think the price can go. Bitcoin futures are already traded on derivatives exchanges and although the ETF fund based on BTC is a less direct method of exposure, SEC Chair Gary Gensler suggested he is disposed to them because of the in-built consumer protections. A week ago, Arcane Research pointed out the statistics ont the CME Bitcoin futures exchange which showed that the institutional investors were coming back online as the price started crashing upwards:
“I think the bitcoin ETF discussion we have seen lately [has] attracted institutions. Maybe they are trying to front-run a possible decision next week, but interest has certainly picked up among institutional investors in October.”
No one is quite sure that the price of BTC will stay as high as it is. Dan Morehead the CEO of Pantera Capital suggested that this bull run could take a turn as soon as BTC ETF becomes officials or it could start tanking by the end of the trading day. Morehead wrote:
“On Wall Street, there’s a saying ‘Buy the rumor, sell the fact. Definitely working in our space.”
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