In response to Bloomberg’s report that the U.S. Securities and Exchange Commission is poised to allow the first U.S. bitcoin futures exchange-traded fund to begin trading, the most popular cryptocurrency, bitcoin, rallied and hit the $60,000 mark for the first time since April 2021.
In a matter of hours on a tumultuous Friday morning (UTC time), BTC rose from $57,300 to more than $60,000 in value. It temporarily climbed above this level before retracing its steps back down.
Bitcoin was trading at $59,766 and had gained about 3% in a day and 11% in a week as of this writing, based on figures by Coingecko.
Locked and loaded
Bloomberg, citing persons who asked not to be identified because they were discussing the decision, said the SEC is unlikely to prevent the crypto units from going on sale next week.
This month, four futures-backed Bitcoin ETFs might begin trading on U.S. exchanges, with deadlines for applications from Valkyrie and VanEck looming, according to the report.
Meanwhile, on Thursday, the SEC’s Office of Investor Education and Advocacy recommended investors carefully consider the risks and benefits of investing in a fund that owns Bitcoin futures contracts before making a decision.
Bitcoin ETF in the offing
Recently, the SEC approved an ETF introduced to the market by ETF issuer Volt Equity, which seeks to track companies that either have a majority of their assets in bitcoin or derive a majority of their revenue from bitcoin-related activities such as bitcoin mining, bitcoin mining hardware manufacturing, or lending services.
As previously noted, a futures-backed exchange-traded fund, also known as “paper bitcoin,” would be unlikely to have a significant impact on the available supply of genuine bitcoins.
A bitcoin ETF, on the other hand, might still be beneficial, particularly because it simplifies a lot of things for institutional investors from a regulatory standpoint and makes purchasing the crypto as part of an existing investment portfolio “completely uncomplicated.”
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