BTC price hits $56K as bulls return and talk focuses on Bitcoin ( $60,115.00 ) ETF approval

Bitcoin ( $60,115.00 ) (BTC) returned to beat the week’s four-month highs on Oct. 8, climbing $2,000 in two hours.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

BTC’s price beats Wednesday’s high

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting just over $56,150 on Bitstamp in a fresh show of bullish momentum.

Wednesday’s dramatic uptick had topped out at $55,800, this remaining the level to beat as the pair then spent Thursday consolidating.

I think we have another $BTC pump coming right away.

A brutal one, if I must say.

— Galaxy (@galaxyBTC) October 7, 2021

Amid anticipation of fresh upside from traders, talk beyond price action continued to focus on the likelihood of an exchange-traded fund (ETF) approval from United States regulator — and its implications.

As Cointelegraph reported, confidence is high that a futures-backed Bitcoin ( $60,115.00 ) ETF will get the go-ahead this month, if not a traditional spot-based product.

As has been the case throughout the years-long battle to get such an approval, however, critics continue to argue that an ETF could ultimately cause more harm than good to Bitcoin ( $60,115.00 ) . In particular, futures came in for scrutiny this week.

“Few understand this Bitcoin ( $60,115.00 ) ETF if approved would have futures as underlying,” macro analyst Alex Krüger explained in a Twitter thread.

“Futures are usually in strong contango (i.e. futures > spot), so at rollover the ETF would *sell low to buy high*, and suffer Contango Bleed. Assets with strong contango bleed trend lower.” 

Krüger added that a spot-based ETF would be the only option attractive to large-volume institutional clients, as the futures-based alternative carries excessive risk.

Mixed views on ETF benefits

Analyst Willy Woo, meanwhile, underlined the overall pros and cons of both kinds of ETF.

Related: Price spike: Are whales front-running the approval of a Bitcoin ( $60,115.00 ) futures ETF?

I think the best thing about ETFs apart from their initial reach is the potential to stem BTC’s unit bias problem.

The long term negatives:
Spot ETFs – increased sell pressure from fees.
Futures ETFs – potential for price suppression and more volatility due to futures dominance.

— Willy Woo (@woonomic) October 8, 2021

The Grayscale Bitcoin ( $60,115.00 ) Trust, the fortunes of which commentators argue are already being impacted by the prospective ETF approval, continued to see negative share price relative to spot, this passing -17% Thursday.

The firm’s CEO, Michael Sonnenshein, has reiterated plans to convert potentially every fund to an ETF in the future.


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