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  • The first US bitcoin futures ETF is likely to start trading next week, Bloomberg reported late on Thursday.
  • It reported the SEC is unlikely to block the products, which would be a "watershed moment for crypto," an analyst said.
  • Bitcoin hit a six-month-high above $60,000 (around R882,000) on Friday, on hopes a bitcoin futures ETF is within reach.
  • For more stories go to www.BusinessInsider.co.za.

The Securities and Exchange Commission is set to allow the first US bitcoin futures exchange-traded fund to start trading next week, Bloomberg reported late on Thursday.

The SEC is not likely to block such products from beginning to trade next week, the news outlet reported, citing people familiar with the matter.

Four proposed bitcoin ETFs are in line for an October decision from the SEC on whether to approve, deny or delay their submissions. The firms involved - ProShares, Valkyrie Investments, Invesco, and VanEck - are among several applicants waiting for word.

ProShares and Invesco's proposals are based on futures contracts and filed under a 1940 law that the chairman of the SEC, Gary Gensler, has said provide "significant investor protection" for mutual funds and ETFs.

While pure bitcoin ETFs have not found favour with Gensler, he has sounded more positive about those based on futures contracts for the digital asset.

The SEC green light would be "a watershed moment for the crypto community, as they have been waiting for this since 2018," Naeem Aslam, chief market analyst at Avatrade, said in a note.

"The reflection of this optimism can also be seen by looking at the bitcoin price, which is only 7% away from its all-time high."

Bitcoin briefly topped $60,000 (around R880,000) for the first time since April on Friday. Its price has been gaining over recent days in anticipation of ETF approval, with many expecting it could regain April's record high of $64,895 (around R954,000) before the end of the year.

Firms waiting for a crypto ETF decision from the SEC include Fidelity, WisdomTree, Wilshire Pheonix, VanEck, First Trust SkyBridge, and Valkyrie, as well as ProShares and Invesco.

Whichever fund secures first approval could gain a significant first-mover advantage, as investors seek exposure to the price of the digital asset in their traditional brokerage and retirement accounts.

Tyler and Cameron Winklevoss were the first to try to create a bitcoin futures ETF, without success, in the US in 2013. This year, crypto ETFs were approved in Canada and Europe.

Anticipation that a bitcoin futures ETF is just around the corner has been brewing, given recent developments.

Cathie Wood's Ark Invest has put its name to an ETF whose SEC application was filed by issuer Alpha Architect on Wednesday. The ARK 21Shares Bitcoin Futures Strategy ETF carries the ticker ARKA, a positive sign of pending regulatory approval, an analyst said.

Some investors are flagging an SEC tweet as another positive signal. The regulator's investor education office on Thursday posted a link to a June notice that warns about crypto funds.

"Before investing in a fund that holds bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits," the tweet said.

The SEC last week gave the go-ahead to Volt Equity's ETF, which tracks stocks with significant exposure to bitcoin - seen as the closest fund to a bitcoin ETF so far.

The SEC didn't immediately respond to Insider's request for comment.

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