By Tom Wilson and Tom Westbrook
LONDON/SINGAPORE - Bitcoin hit a six-month high and was within striking distance of its all-time peak today as traders bet an anticipated listing of a futures-based US exchange traded fund (ETF) could herald investment flows into cryptocurrencies.
Bitcoin, the world's biggest cryptocurrency, rose as much as 1.5% during the Asia session to US$62 991, its highest since mid-April and near its record of $64 895.
Known throughout its 13-year life for its volatility, Bitcoin has risen by some 40% this month on hopes the advent of Bitcoin ETFs – of which several are in the works – will see billions of dollars managed by pension funds and other large investors flow into the sector.
ETFs are securities that track an asset and can be bought or sold on a stock exchange.
ProShares' Bitcoin Strategy ETF is expected to list on Tuesday, provided the US regulator, the Securities and Exchange Commission (SEC), does not object.
Analysts said the ETF would also likely simplify access to cryptocurrencies for retail investors.
"It can attract flows from investors who prefer the ease of an ETF over the perceived risk of an exchange," said Martha Reyes, head of research at crypto exchange Bequant.
Still, other analysts have cautioned the fund will not invest directly in Bitcoin, but rather in Chicago-traded futures, and so therefore any immediate implications for flows may be limited.
But speculators have been wagering its launch is a positive signal for spot prices anyway.
Bitcoin futures rose 1.2%, last trading at $62,380.
Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. Van Eck and Valkyrie are among fund managers pursuing US-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.
The Nasdaq on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF and Grayscale, the world's largest digital currency manager, is planning to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF, CNBC reported.
REUTERS