Bitcoin (BTC) returned on October 8, beating the week’s four-month high, rising $ 2,000 in two hours.
BTC price tops Wednesday high
Data from Cointelegraph Markets Pro and TradingView showed that BTC / USD hit just over $ 56,150 on Bitstamp, in a new show of upward momentum.
Wednesday’s dramatic spike had hit $ 55,800, which was still the level to beat as the pair then spent Thursday consolidating.
I think we have another $ BTC pump right now.
A brutal one, if I have to say that.
– Galaxy (@galaxyBTC) October 7, 2021
Amid anticipation of new uptrends from traders, conversations beyond price action continued to focus on the likelihood of an exchange traded fund (ETF) being approved by the US regulator – and its implications.
As Cointelegraph reported, there is great confidence that a futures-backed Bitcoin ETF will get the green light this month, if not a traditional spot-based product.
However, as during the year-long struggle for such approval, critics continue to argue that an ETF could ultimately do more harm than good to Bitcoin. Futures in particular were put to the test this week.
“Few understand that this Bitcoin ETF, if approved, would have futures as an underlying asset,” said macro analyst Alex Krüger on a Twitter thread.
“Futures are usually in strong contango (i.e. futures> spot) so if the ETF rollover it would sell * low to buy high * and suffer contango bleed. Assets with strong contango bleed are trending down. ”
Krüger added that a spot-based ETF would be the only option that would be attractive to large institutional clients because the futures-based alternative carries undue risk.
Mixed views on the benefits of ETFs
Meanwhile, analyst Willy Woo underlined the general advantages and disadvantages of both types of ETFs.
Related: Price Spike: Are Whales On The Front Line Getting A Bitcoin Futures ETF Approved?
I think the best thing about ETFs besides their initial scope is their potential to curb the BTC unit bias issue.
The long-term negatives:
Spot ETFs – increased selling pressure through fees.
Futures ETFs – potential for price suppression and more volatility due to the dominance of futures.
– Willy Woo (@woonomic) October 8, 2021
The Grayscale Bitcoin Trust, whose assets commentators argue is already being affected by prospective ETF approval, continued to see a negative share price versus the cash market, which topped -17% on Thursday.
The company’s CEO Michael Sonnenshein has reiterated plans to potentially convert any fund into an ETF in the future.