Bitcoin (BTC) returned to a four-month high in the week of October 8, as it climbed to $2,000 in two hours.
1 hour BTC/USD candlestick chart (Bitstamp). Source: TradingView
Bitcoin price peaks on Wednesday
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD reached just over $56,150 on Bitstamp in a fresh bid with bullish momentum.
Wednesday’s sharp rally peaked at $55,800, a level to be overcome when the pair consolidated on Thursday.
In anticipation of the possibility of a new upside from traders, talk outside of price action continued to focus on the potential and implications of US regulator approval of an Exchange Traded Fund (ETF).
According to a Cointelegraph report, there is high confidence that a futures-backed Bitcoin ETF will come clean this month if it is not a traditional spot product.
However, as with years of struggle to gain such approval, critics continue to argue that ETFs may do more harm than good to Bitcoin. Futures contracts, in particular, have come under scrutiny this week.
“Few people realize that this Bitcoin ETF, if approved, will have a fundamental future to base it on,” Macro Analyst Alex Krueger explained on Twitter.
“Futures are usually under heavy trading (i.e. Futures > Spot), so upon conversion, you will sell the ETF at a low price to buy at a high price* and suffer stress bleeding. Assets that are experiencing heavy stress bleeding are declining.”
Krueger added that a spot ETF would be the only attractive option for large institutional clients, as the futures option involves excessive risk.
Differing views on the benefits of ETFs
Meanwhile, analyst Willy Wu highlighted the common pros and cons of both types of ETFs.
Related: Price Rise: Will Whales Get ETF Approval for Bitcoin Futures in the Future?
The Grayscale Bitcoin Trust, whose fortune has already been affected by a potential ETF approval, continued to drop its share price by 17% against the spot price on Thursday.
The company’s CEO, Michael Sonnstein, has repeatedly announced plans to convert each fund into ETFs in the future.