Bitcoin Rallies Above USD 60,000 on ETF Hopes
The most popular cryptocurrency, bitcoin (BTC), rallied and hit the USD 60,000 mark for the first time since April 2021, as Bloomberg reported that the US Securities and Exchange Commission is poised to allow the first US BTC futures exchange-traded fund to begin trading.
On a volatile Friday morning (UTC time), BTC moved from USD 57,300 to above USD 60,000 in a matter of hours, before correcting lower. However, in the last minutes of Friday (UTC time), BTC was already above USD 62,000. On Saturday, 06:25 UTC, BTC was trading at USD 62,334 and was up by almost 5% in a day and 16% in a week. The price jumped by 30% in a month and is now less than 4% from its all-time high of USD 64,805 (per Coingecko), reached in April this year.
BTC price chart:
The regulator isn’t likely to block the products from starting to trade next week, the report said, citing people, who asked not to be named while discussing the decision. Four futures-backed Bitcoin ETFs could begin trading on US exchanges this month, with deadlines for applications from VanEck and Valkyrie also approaching, it added.
Meanwhile, on Thursday, SEC’s Office of Investor Education and Advocacy, urged investors to make sure they “carefully weigh the potential risks and benefits” “before investing in a fund that holds Bitcoin futures contracts.”
Well, guess this means an ETF is inevitable.
— unusual_whales (@unusual_whales) October 14, 2021
This month, the SEC already approved an ETF, brought to the market by ETF issuer Volt Equity, that aims to track companies that either have a majority of their assets in bitcoin, or derive a majority of their revenue from related activities, including Bitcoin mining, mining hardware manufacturing, or lending services.
As reported, a futures-backed ETF – known as “paper bitcoin”– would be very unlikely to have much impact in terms of the available supply of actual bitcoins. However, such an ETF could still be useful, especially because it simplifies a lot of things for institutional investors from a regulatory standpoint and it also makes buying bitcoin as part of an existing investment portfolio “totally straightforward.”
However, some analysts warn the crypto community that it may be overestimating how much demand there is for such an ETF. For example, Bloomberg expects only about USD 4bn of demand in the first 12 months for the exchange-traded fund. The figure represents just around 1% of bitcoin’s market capitalization and around 3% of all bitcoin futures traded.
“All-time highs of nearly USD 65,000 will be the next resistance level before a potential price discovery phase. While the BTC price has fiercely rallied over the past few weeks, bitcoin balance on exchanges remains at the lowest levels in nine months, indicating investors are holding bitcoin in wallets rather than readying themselves to sell,” Will Morris, Sales Trader at the UK based digital asset broker GlobalBlock, said in an emailed comment.
However, as reported, in a recent letter to investors, Dan Morehead, CEO of crypto investment firm Pantera Capital, reminded readers about the old Wall Street saying of “buy the rumor, sell the fact.”
“Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table,” the CEO said.
Meanwhile, Dmitry Mishunin, Founder and CEO of HashEX, a smart contract audit company, stressed that Bitcoin on-chain data shows that in September the average BTC transaction value was on the rise.
“We do not need more proof to see the growing interest in Bitcoin from institutional and high-net-worth individual investors. This sole piece of on-chain data shows great prospects for bitcoin’s continued price growth as these amounts of liquidity clearly are not aimed at the short term,” Mishunin said.
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Reactions:
Also should add that @ValkyrieFunds has filed their 8A which essentially registers a security for trading on exchange. Nothing from proshares on that front yet. So Valkyrie almost certainly going to begin trading next week as well if i had to guess. https://t.co/nDjL0WDuv2
— James Seyffart (@JSeyff) October 15, 2021
#Bitcoin about to break $60,000 usd. The Bitcoin futures ETF news is actually bad, in my opinion, because what is needed is a real BTC fund, not an easily manipulated futures fund.
— Don Ricardo Salinas Pliego (@RicardoBSalinas) October 15, 2021
do not react to policy news until it is announced
— Neeraj K Agrawal (@NeerajKA) October 15, 2021
Best case scenario from a short-term trading perspective
— Alex Krüger (@krugermacro) October 15, 2021
BTC 65K by Monday
ProShares ETF rejected on Monday, down to 55K (38.2 fib)
Valkyrie ETF approved a week later, onwards to 75K
2/ $186-B worth $BTC moved on the network.
— Ki Young Ju (@ki_young_ju) October 15, 2021
These funds didn't go to exchanges, it's highly likely OTC deals according to the exchange fund flow ratio.https://t.co/ZSTeAzcGVA
After almost a decade in this space, I can confirm — causality is usually arbitrarily assigned.
— cbspears ◉ (@cbspears) October 15, 2021
🙏 $1m is preordained. 🙏 https://t.co/fs0TUv1AWD
2021 since ATHs:
— Lyle Pratt (@lylepratt) October 15, 2021
Chinese hashrate migration to US
SEC allows Bitcoin ETF
Tether manipulation debunked
Price discovery coming soon. https://t.co/o8YdFrIvS3
With oil there are not good alternatives to buying futures or buying ETFs that own futures. With BTC, even if there isnt a bad contango its still so easy to buy spot, unlike oil. The arb is a function of collateral. If brokers will extend margin where futures and bitcoin net…
— Jason Strasser (strassa2.eth) (@strassa2) October 15, 2021
Regardless of the ETF decisions on Monday, Tuesday, Friday, etc.. One thing is for sure.. it's going to be a CRAZY week/end. pic.twitter.com/NAZpP3aDul
— andrew wertheim 🪐 (@awertheim) October 15, 2021
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Learn more:
– Experts Disagree on Prospects of Bitcoin ETF in 2021 as Deadline Nears
– Not Ideal, but ‘Better Than Nothing’ – Market Awaits ‘Paper Bitcoin’ ETF
– Bitcoin and Ethereum Sees Deeper Markets, Maturing as Assets
– SEC Approves Bitcoin-Related ETF as Market Awaits for ‘Real’ BTC ETF
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(Updated at 04:49 UTC with a comment from SEC’s Office of Investor Education and Advocacy. Updated at 05:25 UTC with the latest market data. Updated at 05:58 UTC with the latest market data and reactions. Updated at 07:38 UTC with additional reactions. Updated at 11:45 UTC with the latest market data and additional comments. Updated at 14:17 UTC with the latest market data. Updated at 16:27 UTC with the latest market data. Updated at 17:26 UTC with the latest market data. Updated on October 16, 06:28 UTC, with the latest market data. )
