On Monday, Bitcoin traded around six-month highs in anticipation of the United States' first futures-based bitcoin exchange-traded funds (ETF), which investors expect will boost cryptocurrency trading volumes.
The ProShares Bitcoin Strategy ETF will complete a 75-day period since the fund management filed proposals and could begin trading on Tuesday if the Securities and Exchange Commission (SEC) does not protest.
In the coming days and weeks, more fund managers may offer bitcoin ETFs, which might lead to increased investment in digital assets.
The world's most valuable cryptocurrency last traded at $62,288, close to a six-month high of $62,944 set on Friday and not far from its all-time high of $64,895 set in April.
Ether, another famous Ethereum blockchain asset, was trading at $3,866 and has been increasing in lockstep with bitcoin since mid-September.
“To those watching the space carefully, the news of a suite of futures-tracking ETFs is not new, and to many, this is a step forward but not the game-changer that others are sensing,” Chris Weston, head of research at Pepperstone in Melbourne, Australia, said.
“We've been excited by a spot ETF before, and this may need more work on the regulation front.”
The VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie, and Galaxy Digital Funds are among the fund managers who have applied to launch bitcoin ETFs in the United States.
The Valkyrie Bitcoin Strategy ETF was accepted for listing on the Nasdaq on Friday. According to CNBC on Sunday, Grayscale, the world's largest digital currency manager, plans to turn its flagship product, the Grayscale Bitcoin Trust, into a spot bitcoin ETF.
After months of back-and-forth between the SEC and potential bitcoin futures ETF issuers, the regulator appears ready to approve a handful of files that would allow regular and institutional investors alike to have access to cryptocurrencies.
The SEC does not have to give specific approval to ETFs, which can be launched after a 75-day period if the US agency has no complaints, according to the rule sets used by ETF issuers.
Cryptocurrency investors anticipate that the approval of the first U.S. bitcoin ETF will result in an influx of capital from institutional investors who are now unable to participate in digital coins.
Rising worldwide inflation fears have fueled demand for bitcoin, which is limited in quantity compared to the plethora of currencies produced by central banks in recent years to bolster their economies.
“Unlike its previous rallies, there doesn't seem to be much of exuberance in the market. A growing number of investors started to think inflation may not be temporary and it is possible that bitcoin is getting chosen as a hedge against inflation,” said Makoto Sakumra, an analyst at NLI Research Institute.
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