Bitcoin (BTC/USD) Breaks $60k on Growing Futures-Based ETF Expectations

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BITCOIN (BTC/USD) PRICES, CHARTS, AND ANALYSIS:

• Bitcoin (BTC/USD) is back at multi-month highs on ETF chatter.
• A new all-time high is on the cards.

 

The past few weeks we have regularly mentioned that the SEC is likely to look kindly upon the few Bitcoin futures-based ETFs applications in its pending tray, especially after SEC chair Gary Gensler’s positive commentary over the last two months. At a conference a few weeks ago, Mr. Gensler noted that the 1940 law provides significant investor protection for both mutual funds and ETFs. Bitcoin monthly futures are traded on the CME and are cash-settled. Turnover and open interest in Bitcoin futures have jumped sharply in the past few weeks ahead of the expected ETF announcement. Many see the creation of Bitcoin ETFs as the next step in the evolution of the cryptocurrency market into a mainstream asset class. While all eyes are currently on Bitcoin, the second-largest cryptocurrency by market cap, Ethereum, also has a futures contract with the CME and is likely to be the next cab off the ETF rank if a Bitcoin ETF launches successfully.

Bitcoin (BTC) Grinding Back to Multi-Month Highs, Volt ETF Offers Crypto Diversification

Bitcoin has been rallying steadily over the last few weeks after trading $40k in late September. The rally, fueled by ETF talk and an overall positive backdrop, has hardly taken a step back, leaving buyers chasing pieces higher. The chart below shows the recent upward trend that has held BTC for the last 10 days breaking to the upside and in the process taking out the double-top seen in May at $59,581. If one or more futures-based Bitcoin ETFs are granted by the SEC, the all-time high made in April this year will come under pressure and will likely be broken quickly.

As always with the cryptocurrency market, care needs to be taken as the asset class has a history of throwing up sharp, unexpected moves. With the potential for a Bitcoin ETF being permissioned this year already baked in the market over the last couple of months, traders should be wary of the potential for a quick bout of profit-taking by some of the more active accounts.

BITCOIN (BTC/USD) DAILY PRICE CHART - OCTOBER 15, 2021

What is your view on Bitcoin (BTC) – bullish or bearish?

 

By Nick Cawley, Strategist, 15th October 2021. DailyFX