Bitcoin surged on SEC rumors that the agency will approve a Bitcoin ETF in 2 weeks and now we can see the price of the cryptocurrency spiked 8% today above $55,000 so let’s take a closer look at our bitcoin news today.
The price of BTC is surging and some are putting it down to the imminent BTC ETF approval from the SEC. The Bitcoin ETF is an investment product that allows investors to buy shares that represent the digital asset without having to deal with teh crypto themselves. An ETF doesn’t exist yet in the US because the SEC rejected applications for the product, citing concerns of price manipulation on the market. The industry has longed for a Bitcoin ETF to be approved and the expectation is that when one does happen, it will lead to a huge flow of institutional money on the market and will push the price of BTC even higher.
Yes, the SEC has kicked can on bitcoin ETF approval BUT that is for the physically-backed ones under ’33 Act. The futures ETFs filed under the ’40 Act (which Genz loves) are very much alive and likely on schedule (we think 75% chance approved in Oct). Here’s our odds: https://t.co/cSZ8aDsITl pic.twitter.com/DUEvRANvO7
— Eric Balchunas (@EricBalchunas) October 2, 2021
At the moment, about 13 companies applied for the SEC to launch an ETF and are still awaiting an answer. The ETF experts say it is likely one will get approved on October 18 therefore Bitcoin surged on SEC rumors for an apparent ETF approval. However, this means that the SEC will approve the Bitcoin futures ETF and not one that will track the BTC spot market. Bloomberg ETF analyst Eric Balchunas noted:
“The futures ETFs filed under the ’40 Act (which Genz loves) are very much alive and likely on schedule (we think 75% chance approved in Oct).”
This is what crypto markets are trading now. The dominant narrative is a bitcoin ETF. Dissapoint or not, can worry about that later. https://t.co/aIv3BFZqI4
— Alex Krüger (@krugermacro) October 6, 2021
The futures ETF will allow investors to buy shares that represent futures contracts that bet on the price of Bitcoin going up and down rather than the digital asset itself. These products were criticized by those in the crypto space because they believe that it Is not what investors want because according to crypto purists, it will be less liquid and more costly for both the issuers and the investors compared to the spot-based products.
CME Futures basis in BTC blew out over last 24 hours,
My guess,1) Folks are front-running a futures-based BTC ETF2) Short are getting margin-called, And, likely both.
Allowing BTC to break from other risk-assets, driving the inflation/gold narrative at just the right moment.
— Mike Bucella (@MikeBucella) October 6, 2021
These talks of approval are pushing the price of BTC and at the time of writing, the asset was up over 8% in the past day and touched $55,000 before dropping to $54,811. The ex-Banker and trader Alex Kruger said:
“If it passes, it will be a futures. It is not a rumour—some strongly believe it will be approved. It would be a horrible product ironically: the SEC is still concerned about market manipulation and lack of agreements with exchanges to provide them with visibility. They have always been so, and that hasn’t changed.”