This could make bitcoin bigger than ever 0:58
London (CNN Business) -
This year, cryptocurrencies are up.
They have come down.
But they never seem to be completely offside.
What's Happening: Excitement around bitcoin is growing again as a financial tool is expected to debut this week that could increase the cryptocurrency's exposure.
After falling in the spring, bitcoin is now trading above $ 60,000, not far from its all-time high of more than $ 64,800 reached in April.
So far this month it has risen more than 40%.
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What Drives Profits? Investors are excited about the long-awaited launch of the first exchange-traded bitcoin futures fund.
The launch of the ProShares Bitcoin Strategy ETF is planned for this Tuesday, according to the company.
An ETF is a listed investment fund.
The fund will provide an entry point for investors who are interested in cryptocurrencies but do not want to deal with buying and selling the tokens.
The Securities and Exchange Commission (SEC) said last week that it could finally approve such an instrument, which the cryptocurrency sector has long lobbied for.
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"Before investing in a fund that holds bitcoin futures contracts, be sure to carefully weigh the potential risks and rewards," the agency tweeted.
If approved, the ETF could give a strong boost to the latest rally in bitcoin.
"We view the approval of a bitcoin futures ETF as a positive step for the digital asset space," Isaac Boltansky, director of policy research at BTIG, said in a recent note to clients.
“That does not mean that regulators completely abandon their distrust of cryptocurrencies.” Boltansky noted that a futures ETF is different from an ETF that buys and sells bitcoin outright. In this regard, the SEC appears to remain skeptical.
And the entry into force of stricter regulations continues to lurk.
Supervisory bodies face increased pressure to act as investments increase.
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In a recent speech, Bank of England official Jon Cunliffe noted that the market crash of $ 1.2 trillion in subprime mortgage-backed securities triggered the 2008 financial crisis. Cryptocurrencies, for their part, already represent US $ 2.3 trillion.
"The $ 2.3 trillion, of course, must be viewed in the context of the $ 250 trillion global financial system," Cunliffe said.
"But, as the financial crisis showed us, you don't have to represent a large proportion of the financial sector to trigger financial stability problems."
Some players in the sector are aware of the possible problems.
Coinbase published a proposal to regulate digital assets last Thursday.
The company, which went public earlier this year, called for an American body to be appointed to oversee crypto securities.
"When new questions or political challenges arise, the ability of a single dedicated regulatory body to respond in an efficient and timely manner benefits everyone," Coinbase noted in an investigation.
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