SINGAPORE Reuters - Bitcoin hit a six-month high and was within striking distance of a record on Tuesday as traders bet an anticipated listing in a futures-based U.S. exchange traded fund could herald investment flows into Bitcoin and cryptocurrency assets.
The world's biggest cryptocurrency by market value rose as far as 1.5% in the Asia session of $62,991, its strongest level since the record-breaking capitalization of $64,895 in April.
It is up some 40% in October on hopes that the advent of Bitcoin Exchange traded funds ETF of which several are in the works, will allow billions of dollars managed by pension funds and other institutional investors to flow into the sector.
The Bitcoin Strategy ETF of ProShares will list under the ticker BITO on Tuesday after the Securities and Exchange Commission is informed that the U.S. regulator, the Securities and Exchange Commission, does not object to the listing.
Analysts cautioned that the fund will not invest directly in bitcoin - rather in Chicago-traded futures - and may so happen to not have immediate implications for flows. But speculators have been betting its launch is a positive signal for spot prices anyway.
Bitcoin futures rose Tuesday, last trading at $62,690 and spot prices could increase if cash flows continue in, said cryptocurrency analysts at Arcane Research.
This could lead to higher buying pressure on CME, causing more open interest to rise. This will attract more cash and carry opportunities, leading to buying pressure in the spot market, they said in a note.
This year digital ETFs launched in Canada and Europe to support emerging interest in cryptocurrency. VanEck and Valkyrie are among the fund managers seeking U.S. - listed ETF products, although Invesco dropped its plans for a futures-based ETF on Monday.
The Nasdaq on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF and Grayscale is planning to convert its upcoming asset backed by cash to a spot bitcoin ETF, CNBC said.
ProShares ETF will begin trading on Tuesday after a 25-day period during which the SEC could object to the listing. It was on Monday.
Ether, the second largest cryptocurrency, has traded bitcoins and also tracked Bitcoin's rise on Tuesday. It was last up 1.2% at $3,790 and near $3,790.