- A Bitcoin futures exchange-traded fund is expected to launch next week and investors are excited.
- This could help the price of bitcoin to reach an all-time high of $ 85,000, an analyst said.
- An ETF linked to bitcoin would make it easier for investors to gain exposure to cryptocurrency.
A bitcoin futures exchange-traded fund is set to launch next week and is getting the crypto industry excited.
It’s not quite the pure bitcoin ETF many crypto enthusiasts had hoped for, but analysts say it should still drive institutions into the digital asset market like never before.
If investors buy into the fund heavily, bitcoin could hit a record high of $ 85,000 in the coming months, according to Edward Moya, senior market analyst at the Oanda trading platform.
Bitcoin crossed $ 60,000 last week for the first time since April as excitement mounted. It was roughly flat on Sunday at $ 61,050, according to Bloomberg prices, putting it within range of April’s high of just under $ 65,000.
“A successful bitcoin ETF launch next week could easily support bitcoin’s race to register territory,” Moya said. “The Bitcoin craze has spread across social media platforms over the past two weeks.”
“[If] initial trading volumes are strong, bitcoin may have enough momentum to target the $ 74,500 region, ”Moya said. He added that bitcoin “may have a path to $ 85,000” in the coming months.
Simon Peters, crypto-asset analyst at eToro, said: “The market is clearly reacting positively as we move closer and closer to the ‘holy grail’ of a bitcoin ETF of the underlying asset.”
ProShares, a U.S. specialist in exchange traded products, is expected to launch a bitcoin futures ETF next week, according to a filing with the Securities and Exchange Commission. CNBC reported that someone familiar with SEC thinking said the ETF is expected to start trading in the coming days.
It will be called the ProShares Bitcoin Strategy ETF and will trade with the symbol “BITO”.
An exchange-traded fund is a type of security that trades on an exchange – meaning investors can buy and sell stocks – and track the performance of an asset or group of assets.
The ProShares ETF will track bitcoin futures contracts rather than bitcoin itself. Futures contracts are contracts to buy and sell an asset at a predetermined price and time. They closely track bitcoin’s price movements, but mean investors don’t have to physically own the token.
Read more: 2 ETF veterans turned crypto investors explain why they think the SEC should approve a bitcoin ETF that invests in digital currency itself instead of futures
SEC chief Gary Gensler has been hesitant to approve a pure bitcoin ETF, in part because of concerns about sharp price swings in the market.
But the SEC believes that a futures ETF is safer. Bitcoin futures are offered by the Chicago Mercantile Exchange, a huge financial institution. Investors must also deposit collateral to trade futures contracts.
The ETF would make it much easier for retail and institutional investors to gain exposure to bitcoin, analysts said. “A SEC Bitcoin ETF approval is a watershed moment for the crypto industry as it could be the key factor in securing the next wave of crypto investors,” Moya said.
However, Matt Blom, global sales manager for crypto firm Eqonex, said he believes the SEC will not approve a bitcoin-based ETF itself.
“As great as it is to have finally recognized this asset class, the supply squeeze that we all really want to see is still out of reach,” he said.
Other companies – namely Invesco, Valkyrie and VanEck – have also requested the launch of bitcoin futures ETFs and may see their products start trading soon. ProShares did not immediately respond to a request for comment.