• Wed. Jun 22nd, 2022

Rtl today – digital currency: bitcoin surpasses $ 60,000 on hopes of US fund approval

Bitcoin crossed the $ 60,000 mark for the first time since April amid growing optimism that U.S. regulators will give the green light to the first U.S. cryptocurrency-traded futures fund.

Digital currency is up more than 40% from a month ago, reaching $ 62,253 by 2050 GMT, according to data from Bloomberg News, which reported that the United States Securities and Exchange Commission may authorize the ‘ETF to trade next week.

The SEC has rejected attempts to create a Bitcoin ETF since 2013.

“A SEC Bitcoin ETF approval is a turning point for the crypto industry as it could be the key driver in securing the next wave of crypto investors,” said Edward Moya, senior market analyst at OANDA.

An ETF is a financial instrument that can include different assets and be traded on a stock exchange like other securities. A futures ETF means that the product will be bought or sold at a set price at a later date.

The SEC fueled speculation about the impending approval after writing the following advice on one of its Twitter accounts: “Before investing in a fund that holds Bitcoin futures, be sure to weigh the potential risks and benefits. “

The ETF would add to a turbulent year for the world’s leading cryptocurrency, which hit a record high of $ 64,870 in April and became legal tender in El Salvador, the first country to officially adopt it.

China, meanwhile, has cracked down on trading and mining in cryptocurrencies, which are created by solving complex equations – a business that consumes huge amounts of energy.

– SEC U-turn –

Bloomberg, who cited unidentified people familiar with the matter, reported that unlike previous Bitcoin ETF requests that the SEC had previously rejected, the proposals made by financial firms ProShares and Invesco are based on futures contracts.

The proposals were filed under mutual fund rules, which SEC Chairman Gary Gensler said provide “important protections for investors,” the news agency reported.

“This is a key development for the crypto space as it would allow many investors who were about to enter the market in a more traditional way,” said Walid Koudmani, analyst at XTB online trading. .

An ETF would reassure investors “about previously associated risks such as lack of regulation and the possibility of their portfolio being hacked,” Koudmani said.

There are ETFs that include Bitcoin in other countries, but getting one in the United States would take cryptocurrency to another level.

“In America’s case, this is the biggest and most important market. To date, they (traditional investors) haven’t had a simple vehicle to invest in Bitcoin,” Charlie Erith, CEO of ByteTree Asset Management, which specializes in cryptocurrencies, told AFP

Erith warned that “the impact on the market might be overstated. You might see a short sale, but it won’t be significant.”

But, he added, “in the long term, this is an important development. It indicates that authorities are increasingly comfortable with people with crypto-assets.”

js-lth-har-jmb / bgs

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