Cryptocurrency

Bitcoin price hits $56,000

Bitcoin.org, one of the first websites about Bitcoin (BTC), has been hacked by online scammers and down as of the time of writing.

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

Data 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.

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 earlier reported, confidence is high that a futures-backed Bitcoin 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. In particular, futures came in for scrutiny this week.

“Few understand this bitcoin ETF if approved would have futures as underlying,” macro analyst Alex Krueger 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.”

Krueger 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.

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

The Grayscale Bitcoin 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 future.

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