Bitcoin hits $56,000 as bulls return, rhetoric focuses on Bitcoin ETF approval

Bitcoin broke another four-month high for the week on Oct. 8, climbing $2,000 in two hours.

BTC/USD 1-hour candle chart (Bitstamp) Source: TradingView

Bitcoin's Price Breaks Wednesday's Highs

Data from Cointelegraph Markets Pro and TradingView shows BTC/USD trading just above $56,150 on Bitstamp, showing renewed bullish momentum.

Wednesday's dramatic rise topped out at $55,800, which remains a level to break as BTC/USD consolidates on Thursday.

I think we'll see another uptick in BTC right away.

It would be brutal, I say.

— Galaxy (@galaxyBTC) October 7, 2021

Amid traders' anticipation of a fresh rally, aside from price action, the discussion continued to focus on the possibility of U.S. regulators approving an exchange-traded fund (ETF) and its implications

As Cointelegraph reported, confidence is high that a futures-backed Bitcoin ETF (if not a traditional spot-based product) will be approved this month.

However, as has been the multi-year battle for approval, critics continue to argue that the ETF could end up doing more harm than good to Bitcoin. In particular, futures have come under scrutiny this week.

Macro analyst Alex Krüger explained on Twitter: “Bitcoin ETF that would have futures as its underlying asset if approved is little known.”

Krüger added that spot-based ETFs will be the only attractive option for high-volume institutional clients, as futures-based alternatives are too risky.

Opinions on the benefits of ETFs are mixed

Meanwhile, analyst Willy Woo highlighted the overall pros and cons of both ETFs.

I think the best thing about an ETF, aside from its initial reach, is its potential to curb Bitcoin's unit bias problem.

Long term negative effects:

Spot ETFs - Increased selling pressure from fees.

Futures ETFs – have the potential to depress prices and increase volatility due to the dominance of futures.

— Willy Woo (@woonomic) October 8, 2021

Commentators believe that the expected ETF approval has affected the fate of the Grayscale Bitcoin Trust, whose share price is still negative relative to the spot price, with a negative premium of more than 17% on Thursday.

Chief executive Michael Sonnenshein reiterated plans to potentially convert all funds to ETFs in the future.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.