BTC price hits $ 56,000 as the bulls reverse and discussion focuses on Bitcoin ETF approval

Bitcoin (BTC) bounced back on October 8, beating its four-month high, climbing to $ 2,000 in two hours.

BTC price breaks Wednesday high

Data from Cointelegraph Markets Pro and TradingView show that BTC / USD is just above $ 56,150 on Bitstamp in a new upward move from upward momentum.

Wednesday’s impressive rally hit $ 55,800, which is still a level to beat as the pair subsequently spent Thursday consolidating.

I think we have another one $ BTC Pump arrived immediately.

Brutality if I have to say that.

– galaxy (@galaxyBTC) October 7, 2021

Amid new optimistic expectations from traders, the discussion beyond price action continues to focus on the possibility of an exchange traded fund (ETF) being approved by US regulators – and the implications.

As Cointelegraph reported, there is great confidence that a Bitcoin futures ETF with futures contract will go live this month, if not a traditional spot product.

However, as has happened during the year-long battle for such approval, critics continue to argue that the ETF could ultimately do more harm than good to Bitcoin. Futures contracts in particular are under scrutiny this week.

“Few people understand that if this Bitcoin ETF is approved, it will be based on a futures contract,” macro analyst Alex Krueger stated in a note. Twitter thread.

“Futures are usually in strong contango (i.e. assets with strong downtrend contango will be lower.”

Kruger Add that a spot ETF would be the only attractive option for high-volume institutional clients, as the futures-based alternative carries undue risk.

Mixed views on the benefits of ETFs

Meanwhile, analyst Willy Woo highlights the common advantages and disadvantages of both types of ETFs.

Related: Price Spike: Are Whales Ahead of Bitcoin Futures ETF Approval?

I think the best thing about ETFs going beyond their original scope is their ability to prevent the BTC unit bias issue.

The long-term negatives:
Spot ETFs – increased selling pressure through fees.
Futures ETFs – potentially more price restricted and volatile due to the dominance of futures.

– Willy Woo (@woonomic) October 8, 2021

Grayscale Bitcoin Trust, whose fortunes have been impacted by the approval of a potential ETF, continues to see negative share prices against the spot market, topping -17% on Thursday.

The company’s CEO, Michael Sonnenshein, reiterated plans to convert all potential funds into an ETF in the future.