Bitcoin nears $60,000 as investors eye first US ETFs

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A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration. — Reuters/File
A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration. — Reuters/File

Bitcoin hit a six-month high on Friday, approaching the record hit in April, as traders became increasingly confident that US regulators would approve the launch of an exchange-traded fund based on its futures contracts.

The world's biggest cryptocurrency rose nearly 4 per cent to as high as $59,664, its highest since mid-April. It has doubled in value this year and is near April's record high of $64,895.

The US Securities and Exchange Commission (SEC) is poised to allow the first US bitcoin futures Exchange Traded Funds (ETFs) to begin trading next week, Bloomberg News reported on Thursday, citing people familiar with the matter.

Ben Caselin, head of research and strategy at Asia-based cryptocurrency exchange AAX, said bitcoin's spike above $59,000 wasn't arbitrary and long-term investors had been accumulating it for a while.

Read more: Bitcoin hits peak after Tesla invests $1.5bn

"It is widely expected that Q4 will see significant progress around a bitcoin ETF in the US," he said.

Friday's moves were also spurred by a tweet from the SEC's investor education office, he said.

"Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits," the SEC tweet stated.

Cryptocurrency investors have been waiting for news of the approval of the country's first bitcoin ETF, and some of bitcoin's rally in recent months has been in anticipation of that move and how it could speed up its mainstream adoption and trading.

Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch bitcoin ETFs in the United States. Cryptocurrency ETFs have been launched this year in Canada and Europe.

SEC Chair Gary Gensler has previously said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks.

The Bloomberg report said that the proposals by ProShares and Invesco are based on futures contracts and were filed under mutual fund rules that Gensler has said provide "significant investor protections".

The SEC did not immediately respond to a request for comment on the report.

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