Bitcoin smashes through its previous record high

Bitcoin smashed through its previous record high on Wednesday as the first US bitcoin futures-based exchange-traded fund (ETF) looked set to open firmer after surging on its debut on Tuesday.

The world’s leading cryptocurrency trading above US$66 000 shortly before 4pm South African time, well above its previous record high of $64 895.22 it hit on 14 April this year.

Tuesday was the first day of trading for the ProShares Bitcoin Strategy ETF — a development that market participants say is likely to drive investment into the digital asset.

The ETF closed up 2.59% at $41.94 on Tuesday, with around $1-billion worth of shares trading hands on Intercontinental Exchange’s ICE.N Arca exchange. It was trading around 0.2% higher before the market opened.

James Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private wealth manager, said the launch of the new product was “meaningful” for bitcoin.

Will flow

Theoretically, any licensed brokerage firm in the US which wants to take on this ETF can do so as easily as any other ETF, which “should make it available to a lot of folks”, said Quinn.

While the ETF is based on bitcoin futures, Quinn said the trades and hedges underpinning the ETF means activity will flow into the spot market and the bitcoin price.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing US-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.  — Reported by Alun John, Tom Westbrook and Elizabeth Howcroft, (c) 2021 Reuters with editing by NewsCentral Media