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Bitcoin in red on October 17, but remains above $60,000 on US ETF fund approval nod

·3-min read

Cryptocurrency prices continue to be in the red on 17 October. The global cryptocurrency market cap is Rs 185.34 lakh crore, a 0.36 percent decrease over the last day, while the total crypto market volume over the last 24 hours is Rs 6,90,322 lakh crore, which makes a 29.88 percent decrease.

Bitcoin's price is currently $60,681 or (Rs 47,53,049) and its dominance is currently 46.40 percent, a decrease of 0.14 percent over the day.

But the crazy swings that this currency has seen this year have kept investors engaged, nonetheless. From hitting a low of under $30,000 (‚¹ 22.51 lakh) in May-June to reaching a high of $64,000 (‚¹ 48 lakh) in April, the world's largest cryptocurrency has been on a wild swing. But Bitcoin managed to recover every time it lost its values, raising hopes of investors in its long-term future. The recent rally has fuelled hope that Bitcoin is poised for an unprecedented rally soon.

Bitcoin breached the $60,000 mark for the first time since April on Saturday, on growing optimism that American regulators will greenlight the first US futures exchange-traded fund for the cryptocurrency.

The digital currency was up more than 40 percent from a month ago, reaching $62,253 at 2050 GMT, according to Bloomberg News data, which reported that the US Securities and Exchange Commission could allow the ETF to trade next week.

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

"An SEC Bitcoin ETF approval is a watershed moment for the crypto industry as this could be the key driver for getting 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 an exchange like other securities. A futures ETF means the product will be bought or sold at set price at a later date.

The SEC fuelled speculation of the imminent approval after writing the following advice on one of its accounts on Twitter: "Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits."

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

China, meanwhile, has cracked down on trading and mining cryptocurrencies, which are created through solving complex equations, an endeavour that consumes enormous amounts of energy.

SEC U-turn

Bloomberg, which cited unidentified people familiar with the matter, reported that unlike past Bitcoin ETF applications that the SEC rejected before, the proposals made by financial firms ProShares and Invesco are based on futures contracts.

The proposals were filed under mutual fund rules that SEC Chairman Gary Gensler has said provide "significant investor protections", the news agency reported.

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

An ETF would reassure investors "about previously associated risks such as lack of regulations and the possibility of having their wallet hacked", Koudmani said.

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

"In America's case, it's the largest, most important market. To date, they (traditional investors) haven't had a simple vehicle in which to invest in Bitcoin," Charlie Erith, CEO of ByteTree Asset Management, which specialises in cryptocurrencies, told AFP.

Erith cautioned that "the impact on the market might be overblown. You might see a short selloff but it won't be meaningful".

But, he added, "Long term, it's an important development. It signals that authorities are getting more comfortable with people owning cryptoassets".


Also See: Investing in Bitcoin? You may want to know about 'satoshi' before shopping

Crypto relief for India’s COVID-19 crisis pours in, even as it remains a legal grey area

Statue honoring mysterious Bitcoin founder unveiled in Budapest

Read more on Business by Firstpost.

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