Bitcoin Eclipses $60,000 as ETF Approval Finally Arrives in USA

BTC has gone past the $60,000 mark yet again after nearly six months since hitting its all-time high in May.

By
Anirudh Tiwari
on
October 16, 2021
Category:
Blockchain News

SEC Open Up Further to Crypto

Bitcoin (BTC) currently exchanges hands in the $61,000 range after breaking the $60,000 mark on Oct. 15, on the back of new developments for a couple of BTC Exchange Traded Fund (ETF) applications. 

The approval of ETF listings is an indicator of sustained institutional interest in the asset. The United States Securities and Exchange Commission (SEC) put out a notice on Oct. 15, accepting the registration request for the shares of Valkyrie’s Bitcoin Strategy ETF to be listed on Nasdaq that was approved by the exchange on the same day.

The second development came on the same day with the SEC’s acceptance of the registration of securities from ProShares Trust’s BTC ETF that gives investors exposure to the asset through futures contracts. The shares for this ETF will be listed on New York Stock Exchange’s (NYSE), Arca. The filing could be effective as soon as Oct. 18, as per an amendment to the registration statement.

“If crypto is going to be widely adopted, it needs some rules of the road & a cop on the beat to enforce them. To be clear, I am technology-neutral. What I'm not neutral about: Investor protection.” mentioned Gary Gensler on Twitter about the SEC’s regulatory stance about cryptocurrencies.
Source: BTC Price CoinMarketCap

This landmark development has made waves in the derivatives markets as well. The Open Interest (OI) in BTC Futures across various exchanges like Binance, Bybit, OKEx, Chicago Mercantile Exchange (CME) amongst others went past $20 billion once again on Oct. 14 to rise further to hit a six month high of $22.77 billion on Oct. 16 as per data from Bybt.

Source: Exchange BTC Futures Open Interest - Bybt.com

Canadian ETFs Show Strong Performance

Even though the SEC took a lot of time to approve any Bitcoin ETF, regulatory authorities in other countries have been quicker to adopt. Canada is leading the charge in this aspect. The country already has several Bitcoin and Ethereum based ETFs that are listed. The prominent ones out of these are the Purpose Investments Bitcoin ETF and the Evolve Bitcoin ETF that have assets under management (AUM) of $1.3 billion and $151 million respectively. 

Both Purpose and Evolve have Ethereum-based ETFs as well. Although, they have a smaller AUM of $286 million and $96 million respectively.

However, it is noteworthy that both the ETFs in the U.S. that are approved to be listed on their respective exchanges are Bitcoin futures-based ETFs. Several eminent personalities have been skeptical of the inclusion of derivative-based ETFs by the SEC.

“We see bitcoin futures-based funds as inferior products that have consistently underperformed the Bitcoin price and bring additional complexities in regards to how they must be managed, at a higher cost than ETFs. (..) What the SEC seems to be doing is pushing individual investors into higher-risk, lower quality products to get their Bitcoin exposure instead of sticking with the tried-and-true ETF wrapper,” said Matthew Sigel, head of digital assets research at VanEck, in an interview to Bloomberg.

In two other ETF developments, Evolve ETFs launched Canada’s first multi-cryptocurrency ETF that gives investors exposure to both BTC and ETH simultaneously, and, Purpose Investments launched mutual fund units for both its Bitcoin and ETH ETF to allow investors to get exposure to these cryptocurrencies with smaller funds as well.

Meanwhile, additional institutional support keeps piling in for BTC. As previously reported by BSCNews, last week the token witnessed a 21-week high of $225 million in institutional inflows.

“Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. The more decentralized this is, the more resilient the Bitcoin network becomes.” said the CEO of Square, Jack Dorsey via his Twitter account about the company’s endeavor to make mining more accessible to individuals.

Even the benchmark for institutional investment in cryptocurrencies, Grayscale Investments is planning to file an application to convert their flagship product, the Grayscale Bitcoin Trust, the world’s largest BTC fund into a spot ETF as per a report from CNBC.


About Bitcoin

BTC is the first digital currency to spring into existence in January 2009, based on the whitepaper written by a person or a group of persons, named Satoshi Nakamoto. The token hit its all-time high of $64,863 on April 14 this year at the peak of the bull run. BTC has a market capitalization of nearly $1.3 trillion out of the $2.5 trillion market capitalization of the entire cryptocurrency market.

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Anirudh Tiwari

Anirudh is a cryptocurrency analyst and writer who specializes in derivatives, DeFi, regulations and CBDCs. He has a Master’s degree in Finance. Before delving into crypto, he worked with a leading U.S. based investment bank. Apart from work, he is a music connoisseur and likes to play the drums. His largest holdings in crypto are Ethereum, Cardano, and Polkadot.

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