Tuesday, October 26th, 2021

Bitcoin surges 5 percent as optimism grows for SEC approval of ETF


Bitcoin is surging amid hope that the Securities and Exchange Commission is close to approving an exchange-traded fund that incorporates the digital coin. 

Bitcoin was trading at about $57,500 on Thursday morning, up 5 percent over the previous 24 hours, according to Coinbase data

The surge could be tied to hopes that the SEC is close to approving a bitcoin futures ETF, Blockchain.com research chief Garrick Hileman told The Post. 

“There’s growing optimism around a long-weighted bitcoin ETF approval,” said Hileman, who’s also a visiting fellow at the London School of Economics. “There seems to be optimism that it could even happen this quarter.” 

Any approval of a bitcoin-related ETF would broaden investor exposure to the cryptocurrency and send its price soaring, Hileman said.

SEC Chairman Gary Gensler appears more likely to approve a bitcoin futures ETF than a a fund that holds bitcoin directly because he has said that rules around futures ETFs provide greater protections for investors.

A slate of asset managers including Cathie Wood’s ARK Invest have applied to list bitcoin futures ETFs in recent months. 

Additional factors sending bitcoin higher may include greater regulatory scrutiny of other crypto assets like so-called “stablecoins,” which are tied to the value of currencies like the US dollar.

Analysts say SEC Chairman Gary Gensler may be close to approving a bitcoin futures ETF, which analysts say would send bitcoin’s price soaring.
AP

As Federal Reserve Chairman Jay Powell has signaled a potential crackdown on stablecoins, some crypto traders see bitcoin as a safer bet, Hileman said.

“There’s a much greater degree of regulatory clarity for bitcoin vs. other crypto assets,” he said. “You might be seeing flows out of other areas of crypto with less regulatory certainty into bitcoin.” 

After a rough summer where bitcoin fell below $30,000, the cryptocurrency has been on a hot streak this fall. Bitcoin is up 27.9 percent over the past month and is only about $8,000 shy of its all-time record high from April.

Other cryptocurrencies were also up on Thursday. Ethereum had surged 9.5 percent over the previous 24 hours to $3,800, while Cardano was up 4.2 percent at $2.21. 

Shares of crypto exchange Coinbase, which are often correlated with bitcoin’s price, were up 4.2 percent Thursday.

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