Bitcoin tops $60 000, nears record high, on growing US ETF hopes

Bitcoin hit $60 000, almost R878 000, for the first time in six months on Friday, nearing its record high, as traders grew confident that US regulators would approve the launch of an exchange-traded fund (ETF) based on its futures contracts.

Cryptocurrency investors have been waiting for approval of the first US ETF for bitcoin, with bets on such a move fuelling its recent rally.

The world’s biggest cryptocurrency rose 4.5% to its highest level since April 17, and was last at $59 290 (R867 258). It has risen by more than half since September 20 and closing in on its record high of $64 895 (R949 245)  hit in April.

The US Securities and Exchange Commission (SEC) is set to allow the first US bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.

Such a move would open a new path for investors to gain exposure to the emerging asset, traders and analysts said.

“ETFs open up a raft of avenues for people to gain exposure, and there will be a swift move to these structures,” said Charles Hayter, CEO of data firm Crypto Compare, which tracks ETF products.

“It reduces the frictions for investors to gain exposure and gives traditional funds room to use the asset for diversification purposes.”

Bitcoin’s moves on Friday were spurred by a tweet the SEC’s investor education office urging investors to weigh risks and benefits of investing in funds that holds bitcoin futures contracts, said Ben Caselin of Asia-based crypto exchange AAX.

Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch bitcoin ETFs in the United States.

Crypto ETFs have launched this year in Canada and Europe, growing in popularity amid surging interest in digital assets.

SEC Chair Gary Gensler has previously said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks.

Citing people familiar with the matter, the Bloomberg report said proposals by ProShares and Invesco, based on futures contracts, were filed under mutual fund rules that Gensler has said provide “significant investor protections”.

The SEC did not immediately respond to a request for comment on the report.

“It’s one of the final frontiers for mandate access,” said Joseph Edwards, head of research at crypto broker Enigma Securities.

“Plenty of Americans, in particular, have strings attached to how they deploy a lot of their wealth. It allows bitcoin to get in on the sorts of windfall that keep US equities as consistently strong as they are.”