Bitcoin tops $60,000, nears record high, on growing U.S. ETF hopes

By Tom Wilson and Alun John

LONDON/HONG KONG (Reuters) – Bitcoin hit $60,000 for the first time in six months on Friday, nearing its all-time high, as hopes grew that U.S. regulators would allow a futures-based exchange-traded fund (ETF), a move likely to open the path to wider investment in digital assets.

Cryptocurrency investors have been waiting for approval of the first U.S. ETF for bitcoin, with bets on such a move fuelling its recent rally.

The world’s biggest cryptocurrency rose 4.5% to its highest level since Apr. 17, and was last at $59,290. It has risen by more than half since Sept. 20 and closing in on its record high of $64,895 hit in April.

The U.S. Securities and Exchange Commission (SEC) is set to allow the first U.S. bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.

Such a move would open a new path for investors to gain exposure to the emerging asset, traders and analysts said.

“ETFs open up a raft of avenues for people to gain exposure, and there will be a swift move to these structures,” said Charles Hayter, CEO of data firm CryptoCompare, which tracks ETF products.

“It reduces the frictions for investors to gain exposure and gives traditional funds room to use the asset for diversification purposes.”

Bitcoin’s moves on Friday were spurred by a tweet from the SEC’s investor education office urging investors to weigh risks and benefits of investing in funds that holds bitcoin futures contracts, said Ben Caselin of Asia-based crypto exchange AAX.

Graphic: Bitcoin on the rise https://fingfx.thomsonreuters.com/gfx/mkt/movanjqkapa/bitcoin.PNG

Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch bitcoin ETFs in the United States.

Crypto ETFs have launched this year in Canada and Europe, growing in popularity amid surging interest in digital assets.

SEC Chair Gary Gensler has previously said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks.

Citing people familiar with the matter, the Bloomberg report said proposals by ProShares and Invesco, based on futures contracts, were filed under mutual fund rules that Gensler has said provide “significant investor protections”.

The SEC did not immediately respond to a request for comment on the report.

“It’s one of the final frontiers for mandate access,” said Joseph Edwards, head of research at crypto broker Enigma Securities.

“Plenty of Americans in particular have strings attached to how they deploy a lot of their wealth. It allows bitcoin to get in on the sorts of windfall that keep U.S. equities as consistently strong as they are.”

(Reporting by Tom Wilson in London and Alun John in Hong Kong, and Mrinmay Dey and Shubham Kalia in Bengaluru; editing by Alexander Smith and Jason Neely)

By Tom Wilson and Alun John

LONDON/HONG KONG (Reuters) – Bitcoin hit $60,000 for the first time in six months on Friday, nearing its all-time high, as hopes grew that U.S. regulators would allow a futures-based exchange-traded fund (ETF), a move likely to open the path to wider investment in digital assets.

Cryptocurrency investors have been waiting for approval of the first U.S. ETF for bitcoin, with bets on such a move fuelling its recent rally.

The world’s biggest cryptocurrency rose 4.5% to its highest level since Apr. 17, and was last at $59,290. It has risen by more than half since Sept. 20 and closing in on its record high of $64,895 hit in April.

The U.S. Securities and Exchange Commission (SEC) is set to allow the first U.S. bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.

Such a move would open a new path for investors to gain exposure to the emerging asset, traders and analysts said.

“ETFs open up a raft of avenues for people to gain exposure, and there will be a swift move to these structures,” said Charles Hayter, CEO of data firm CryptoCompare, which tracks ETF products.

“It reduces the frictions for investors to gain exposure and gives traditional funds room to use the asset for diversification purposes.”

Bitcoin’s moves on Friday were spurred by a tweet from the SEC’s investor education office urging investors to weigh risks and benefits of investing in funds that holds bitcoin futures contracts, said Ben Caselin of Asia-based crypto exchange AAX.

Graphic: Bitcoin on the rise https://fingfx.thomsonreuters.com/gfx/mkt/movanjqkapa/bitcoin.PNG

Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch bitcoin ETFs in the United States.

Crypto ETFs have launched this year in Canada and Europe, growing in popularity amid surging interest in digital assets.

SEC Chair Gary Gensler has previously said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks.

Citing people familiar with the matter, the Bloomberg report said proposals by ProShares and Invesco, based on futures contracts, were filed under mutual fund rules that Gensler has said provide “significant investor protections”.

The SEC did not immediately respond to a request for comment on the report.

“It’s one of the final frontiers for mandate access,” said Joseph Edwards, head of research at crypto broker Enigma Securities.

“Plenty of Americans in particular have strings attached to how they deploy a lot of their wealth. It allows bitcoin to get in on the sorts of windfall that keep U.S. equities as consistently strong as they are.”

(Reporting by Tom Wilson in London and Alun John in Hong Kong, and Mrinmay Dey and Shubham Kalia in Bengaluru; editing by Alexander Smith and Jason Neely)