Bitcoin has resumed the rises before the imminent premiere, probably this Tuesday, of Proshares Bitcoin Strategy, the first exchange-traded fund (ETF) linked to this cryptocurrency in the United States. The virtual currency grew 5.3% this Monday, to $ 62,180, a few hours after midnight the deadline for the US Securities Market Commission (SEC) to oppose the launch of the new product ends, although everything indicates that it will not prevent it. According to experts, the launch of cryptocurrency-related funds on the market can contribute to increasing the legitimacy of these currencies and facilitating access for large institutional investors.
Permits were requested in the United States in August for four bitcoin futures ETFs – the goal is to trade cryptocurrency futures contracts, not the currency itself – and are pending approval. Tonight the deadline for the SEC to respond to the first of those requests expires, but the agency already hinted last Thursday that it gave the go-ahead with a tweet warning of the potential risks and benefits of investing in these products. If confirmed, Proshares Bitcoin Strategy will be able to start trading this Tuesday.
Crypto advocates have been trying to get a bitcoin ETF approved since 2013. The SEC has rejected authorization requests so far, claiming that the crypto markets are too opaque to know whether the pricing is fair. None of the SEC-supervised reference markets trade bitcoin directly.
The first cryptocurrency has doubled in value since the start of the year, fueled in April by the IPO of Coinbase, the leading cryptocurrency seller. However, the price has been subject to a lot of volatility with messages that increase uncertainty about its future, such as the repressive wave deployed by China against the digital money industry. In September, the Chinese central bank declared the transactions, mining, and even advertising of these currencies illegal. Remarks by Elon Musk, who announced in the spring that Tesla was stopping accepting bitcoins to buy its cars for environmental reasons – bitcoin mining requires a lot of electricity – caused the currency to crash. The CEO of crypto derivatives Delta Exchange, Pankaj Balani, assured on Friday in a note quoted by Bloomberg that the price will rise with the launch of the first ETF: “The volatility will be high.”
“Bitcoin soared last week, approaching its all-time high again. Investors will now be watching to see if the momentum continues earlier this week to break that threshold, ”says Simon Peters, market analyst at multi-asset investment platform eToro. Russian President Vladimir Putin’s remarks last week in an interview on CNBC, which has taken a softer stance on crypto assets than Beijing, have been well received in the market. “Putin’s relative goodwill probably come at a time when Russia is having difficulty accessing international capital in the form of US dollars,” the analyst explains. Moscow has been hit by sanctions since its 2014 invasion of Crimea.
The move by the US regulator comes shortly after Switzerland approved in late September the launch of the first exchange-traded fund in crypto assets. Canada has followed the same path.