Bitcoin (BTC) reached a new all-time high on Wednesday following the successful launch of the first US Bitcoin futures ETF (exchange-traded fund).
The world's largest cryptocurrency climbed 4.1% to $66,909.15 by 5pm CEST, data from CoinMarketCap showed. The coin is currently trading at $65,692, which is still higher than the April established old high of $64,899.
"The key here is whether we are able to establish support above $65,000," said Jesse Proudman, CEO of crypto robo-advisor Makara. "If we can, the classic fourth-quarter crypto rallies we've seen in most years could propel Bitcoin toward some of the great price forecasts we've seen in recent months. However, if selling pressure prevails, it may take a while for the next leg up to materialize."
Positive comments from a vaunted trader also boosted sentiment on Wednesday. Billionaire and investor Paul Tudor Jones called crypto his favourite inflation hedge. In doing so, he explicitly stated that he would rather invest in Bitcoin than gold.
"Bitcoin would be a great hedge. Crypto would be a great hedge," Jones said. "There's a plan for crypto and it's clear that it's winning the race against gold right now .... I think it would also be a very good inflation hedge. It would be my preference over gold at the moment."
Meanwhile, Ethereum (ETH) also approached its all-time high of $4,380 established in May. Like Bitcoin, Ethereum made a solid rise yesterday, back above $4,000, but this morning it even rose above the $4,300 level. On Twitter, the sentiment is mostly positive and many experts expect Ethereum to reach a new all-time high very soon.
The ProShares Bitcoin Strategy ETF, which tracks Bitcoin futures contracts linked to the future price of the cryptocurrency, rose nearly 5% on its first day of trading Tuesday.
Not everyone in the crypto market was impressed. Several Bitcoin investors want an ETF that tracks spot prices rather than futures.
Novice investors have had to learn terms like "contango", where a product's futures price is higher than its spot price, and "backwardation", which is the opposite.
"More products are great, but I just don't see the point of investing in Bitcoin ETFs based on futures when you can actively buy it on the spot market," said Jodie Gunzberg, managing director of CoinDesk Indexes.
"It's not like oil or cattle that are impossible to hold physically for most investors. It's more like gold which is easy to hold. Except the cost is more like oil," she added.
Still, it is a milestone for the emerging crypto industry, which has long been pushing for greater acceptance of Bitcoin and other digital currencies on Wall Street.