Bitcoin poised at 3-year peak, nearing record high

The price of bitcoin rose on speculation that a proposal for the first bitcoin exchange-traded fund that was filed almost four years ago is set to receive approval from the US Securities and Exchange Commission. If approval is obtained, it would make
The price of bitcoin rose on speculation that a proposal for the first bitcoin exchange-traded fund that was filed almost four years ago is set to receive approval from the US Securities and Exchange Commission. If approval is obtained, it would make the digital currency relatively attractive to the often more cautious institutional investor market.PHOTO: REUTERS

LONDON • Digital currency bitcoin hit its highest levels in more than three years on Thursday and came within US$3 of an all-time peak, on speculation that the first bitcoin exchange-traded fund (ETF) is set to receive approval from the US financial regulator.

Traditional financial players have largely shunned the Web-based "cryptocurrency", viewing it as too volatile, complicated and risky, and doubting its inherent value.

Having already risen about 17 per cent this year, it added 3 per cent more on Thursday to hit US$1,160 per bitcoin on Europe's Bitstamp exchange, just shy of the all-time high of US$1,163 that was reached in November 2013.

Some analysts say regulatory approval of a bitcoin ETF would make the currency relatively attractive to the often more cautious institutional investor market.

Three ETFs that track the value of bitcoin have been filed with the US Securities and Exchange Commission (SEC) for approval. The SEC will decide by March 11 whether to approve one filed almost four years ago by brothers Cameron and Tyler Winklevoss. If approval is obtained, it would be the first bitcoin ETF issued and regulated by a US entity.

  • US$1,160

    Price per bitcoin on Europe's Bitstamp exchange - its highest levels in more than three years.

"If approved, this would certainly give a dramatic condoning of bitcoin by the authorities and powers that be," said Mr Charles Hayter, chief executive officer of digital currency analytics firm Cryptocompare. "Perhaps key would be the institutional money which would flow into bitcoin. This would bring a certain amount of stability eventually, but could see short-term exuberance by retail traders."

Over the past year, bitcoin's biggest daily moves have been about 10 per cent - very volatile compared with traditional currencies, but far lower than the daily swings of up to 40 per cent seen in 2013.

Bitcoin climbed 125 per cent last year, outperforming every other currency, as it did every year since 2010, except for 2014.

REUTERS

A version of this article appeared in the print edition of The Straits Times on February 25, 2017, with the headline 'Bitcoin poised at 3-year peak, nearing record high'. Print Edition | Subscribe