Bitcoin prices surged over the weekend and pushed higher Monday amid expectations that an exchange-traded fund tracking futures contracts for the leading crypto would begin trading this week.
ProShares has said its proposed Bitcoin Strategy ETF — to trade under the ticker BITO — could begin trading as soon as Monday, assuming US regulators don’t step in to block its launch.
The asset manager listed 18 October as the proposed public offering date of the fund in an updated, “post-effective” registration statement filed Friday with the Securities and Exchange Commission, indicating that it had won regulatory approval.
The New York Stock Exchange — where BITO is set to trade on the Arca Exchange — certified its approval for listing Friday.
The price of bitcoin jumped 6% from around $59,000 Friday to as much as $62,600 over the weekend, and was holding steady near $62,000 by early Monday. The crypto reached an all-time high of nearly $65,000 in April, and has climbed more than 425% since its price of around $12,000 in mid-October 2020.
US regulators have long pushed back against an ETF for bitcoin itself amid wider caution over regulation in the crypto space.
But after SEC chair Gary Gensler signaled that he would be open to the idea of a crypto ETF, fund managers like ProShares and Invesco filed to operate bitcoin futures ETFs amid speculation that these vehicles were more likely to be greenlit.
An ETF such as BITO would hold futures contracts representing bets on whether the price of bitcoin will rise or fall, similar to ETFs tracking oil and other commodities. While trading in bitcoin itself remains unregulated, futures are traded on and regulated by the Chicago Mercantile Exchange.
“Why you would want to buy a bitcoin futures ETF instead of bitcoin itself escapes me. But if you are an investor that is mandated to only have exposure to regulated markets, then this could be your chance to get involved,” said Jeffrey Halley, an analyst at broker Oanda.
“The all-time high around $65,000 is in sight, and a daily close above that level tilts the technical picture to further gains targeting $80,000 going forward,” Halley added.
This article was published by Dow Jones Newswires