Bitcoin, the world's largest cryptocurrency, hit $60,000 for the first time in six months on Friday, nearing its record high, as traders grew confident that US regulators would approve the launch of an exchange-traded fund (ETF) based on its futures contracts.
Cryptocurrency investors have been waiting for approval of the first US ETF for Bitcoin, whose recent rally is being fuelled in part by anticipation of such a move, which is seen as speeding up the mainstream adoption of digital assets.
Bitcoin rose 4.5 per cent to its highest level since April 17, and was last at $59,290. It has risen by more than half since September 20 and closing in on its record high of $64,895 hit in April.
The US Securities and Exchange Commission (SEC) is expected to allow the first US Bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.
"It is widely expected that Q4 will see significant progress around a Bitcoin ETF in the US," said Ben Caselin, head of research and strategy at Asia-based cryptocurrency exchange AAX.
Friday's moves were spurred, he said, by a tweet from the SEC's investor education office.
"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, chief executive of data company 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."
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 been launched this year in Canada and Europe.
"We have seen more institutional build-up, especially in the past few weeks, than we have at any time since the [Bitcoin price] crash back in April," said Noelle Acheson, head of market insights at Genesis Global Trading.
We have seen more institutional build up, especially in the past few weeks, than we have at any time since the [Bitcoin price] crash back in April
Noelle Acheson,
head of market insights at Genesis Global Trading
SEC chair Gary Gensler 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.
The Bloomberg report, citing people familiar with the matter, said that proposals by ProShares and Invesco are based on futures contracts and were filed under mutual fund rules that Mr Gensler has said provide "significant investor protections".
The SEC did not immediately respond to a request for comment on the Bloomberg report.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
A timeline of the Historical Dictionary of the Arabic Language
- 2018: Formal work begins
- November 2021: First 17 volumes launched
- November 2022: Additional 19 volumes released
- October 2023: Another 31 volumes released
- November 2024: All 127 volumes completed
Mohammed bin Zayed Majlis
Should late investors consider cryptocurrencies?
Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.
They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.
“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.
He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.
Men’s singles
Group A: Son Wan-ho (Kor), Lee Chong Wei (Mas), Ng Long Angus (HK), Chen Long (Chn)
Group B: Kidambi Srikanth (Ind), Shi Yugi (Chn), Chou Tien Chen (Tpe), Viktor Axelsen (Den)
Women’s Singles
Group A: Akane Yamaguchi (Jpn), Pusarla Sindhu (Ind), Sayaka Sato (Jpn), He Bingjiao (Chn)
Group B: Tai Tzu Ying (Tpe), Sung Hi-hyun (Kor), Ratchanok Intanon (Tha), Chen Yufei (Chn)
