Bitcoin hovers near six-month high on ETF hopes

US Securities and Exchange Commission is set to allow the first American bitcoin futures ETF to begin trading this week.

Bitcoin hovered near a six-month high early on Monday on hopes that US regulators would soon allow cryptocurrency exchange-traded funds (ETFs) to trade, while global inflation worries also provided some support.

Bitcoin last stood at $62,359, near Friday’s six-month high of $62,944 and not far from its all-time high of $64,895 hit in April.

The US Securities and Exchange Commission (SEC) is set to allow the first American bitcoin futures ETF to begin trading this week, Bloomberg News reported on Thursday, a move likely to lead to wider investment in digital assets.

Bitcoin has more than doubled since the start of the year, though the ride has been volatile as the market confronts narratives from increasing institutional adoption and greater asset-class maturity to a crypto crackdown in China and concerns about energy usage.

Bitcoin will probably challenge its record highs amid the ETF debut “but it won’t be surprising to see some profit taking come through around those levels as traders might look to sell the news,” said Pankaj Balani, chief executive officer of crypto-derivatives exchange Delta Exchange, in a note on Friday. “Overall the volatility on Bitcoin is going to be high irrespective of how the decision plays out.”

Cryptocurrency players expect the approval of the first US bitcoin ETF to trigger an influx of money from institutional players who cannot invest in digital coins at the moment.

Rising inflation worries also increased appetite for bitcoin, which is in limited supply, in contrast to the ample amount of currencies issued by central banks in recent years as monetary authorities printed money to stimulate their economies.

But some analysts noted that, after the recent rally, investors may sell bitcoin on the ETF news.

“The news of a suite of futures-tracking ETFs is not new to those following the space closely, and to many this is a step forward but not the game-changer that some are sensing,” said Chris Weston, head of research at Pepperstone in Melbourne, Australia.

“We’ve been excited by a spot ETF before, and this may need more work on the regulation front.”

Other cryptos also gained on Monday, with second-largest Ether up about 3.4 percent. Binance Coin has retaken the third spot in crypto market value after a 17 percent rally in the past seven days, according to CoinGecko.com.